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Too close for comfort [Commentary]

The proverbial "revolving door" in Washington politics is nothing new. Everyone knows it happens. Everyone hates it. And yet it continues unchecked. What is new, however, is that the interconnected web of private sector and bureaucratic personnel has moved beyond just Wall Street and financial regulators and committees. It's now expanded into federal regulatory agencies arguably wielding far greater power to act unilaterally: the Environmental Protection Agency (EPA) and the Consumer Financial Protection Bureau (CFPB).

The EPA is responsible for regulations that cost the U.S. economy over $350 billion annually, according to the Competitive Enterprise Institute. Troubling it is, then, that so many current staffers are selected from a handful of progressive advocacy groups whose anti-business tilt is unquestioned. One of these groups is the Natural Resources Defense Council (NRDC).

The affiliation is even more unsettling when you consider the "sue and settle" collusion between the NRDC and EPA that has become rampant in recent years. In sue and settle cases, the NRDC and other environmental advocacy groups sue the EPA, arguing that the agency is taking too long to issue a particular regulation or that it isn't meeting a specific legal requirement.

But rather than taking these cases to court, the EPA frequently opts to settle with the NRDC and other activists. In fact, in several cases the EPA issued a consent agreement to settle such cases the very same day activists filed their lawsuits. That's not simply coincidence.

Even the EPA's official statements have mirrored environmental activists' talking points. As newly uncovered emails reveal, in at least one instance the agency crafted its messaging to conform specifically with the Sierra Club's agenda. EPA officials have frequently provided activists with advance copies of EPA statements and press releases and granted environmentalist groups preferential treatment when it came to waving fees for Freedom of Information Act requests.

The EPA's revolving door has become such an institution that even staffers forced to resign from their government positions land on their feet atop America's most influential environmental organizations. Take Al Armendariz, the EPA's "Region 6" administrator who had to resign after admitting on camera that the agency's goal was to "crucify" those who disagree with the anti-fossil fuel agenda. He smoothly transitioned to running the Sierra Club's "Beyond Coal" initiative.

Though only in its infancy, the newly-created Consumer Financial Protection Bureau (CFPB) is already proving to be a similar revolving door.

Most of the bureau's employees come from partisan backgrounds where cycling freely through activism and government is the norm.

Members of President Obama's election campaigns, top donors to his and Sen. Elizabeth Warren's campaigns, and state Democratic Party officials fill the ranks of the CFPB staff. (The bureau's scholarly employees, meanwhile, bring careers' worth of study in regulatory economics yet no apparent experience in the private sector, where their regulations will be applied.)

Most notably, however, is the dominance of ideological think tanks at the CFPB. Spread throughout the bureau are alumni from the Center for American Progress (which was founded by John Podesta, a former chief of staff to Bill Clinton and current adviser to President Obama), the Center for Responsible Lending, and Americans for Community Organization Reform Now, better known as ACORN — progressive organizations that were heavily involved in crafting the CFPB's structure and powers.

Top CFPB employees don't tend to stick around very long. A shocking number have already left the bureau to accept cushy consultant and lobbying positions.

Along with key staffers like the former chief of staff and senior adviser for mortgage servicing, former deputy director Raj Date left the bureau to start Fenway Summer, a "consumer finance advisory" firm that just so happens to specialize in the regulations of the CFPB — the same ones he was instrumental in creating. Ironically, the CFPB was created in part as a reaction to the national frustration with similarly cozy relationships between the private sector and financial regulators.

The EPA and CFPB arguably have more power to issue regulations that affect our economy than any other regulatory bodies, yet they're among the worst offenders when it comes to cronyism and favoritism among their ranks. It's time Americans are clear that partisan activists and impartial regulation don't mix.

Jeffrey H. Joseph is a business professor at the George Washington University School of Business. His email is jeffrey.joseph.gw@gmail.com.

To respond to this commentary, send an email to talkback@baltimoresun.com. Please include your name and contact information.

Copyright © 2014, The Baltimore Sun
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