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Task force to federal regulators: open your doors to the public and let in more sunshine

October 10, 2008

PHILADELPHIA (Oct. 13, 2008) - Greed may fundamentally explain the current economic crisis, but what we are also seeing is a failure of effective government regulation, says the lead author of a new report on federal rulemaking.

"The immediacy of foreclosures, corporate bankruptcies, and stock market freefalls appears only to confirm, tragically, that regulation truly matters," said Cary Coglianese, associate dean at the University of Pennsylvania Law School and director of the study. 

"Each year, regulators across the federal government create thousands of new rules that affect the economy for good or ill, and when agencies insulate themselves too much from the public, they are more likely to regulate badly and generate distrust."

Federal agencies should do a better job of seeking citizen comment early enough in the process to make meaningful changes in proposed regulations, and they should reach out to all interest groups in an even-handed manner instead of shying away from meeting with any groups at all or meeting only with groups representing just one side of a regulatory issue, he added.

The report, titled "Transparency and Public Participation in the Rulemaking Process: A Nonpartisan Presidential Transition Task Force Report," was completed prior to the current economic turmoil and will be featured at the Oct. 16 meeting of the ABA's Administrative Law and Regulatory Practice Section in Washington, D.C.

Coglianese initiated the study in response to a request by staff at OMB Watch, a Washington, D.C.-based organization interested in regulatory reform. Coglianese and other task force members worked independently to develop their reform recommendations, which were not vetted or approved by OMB Watch.  The task force's members came from varied backgrounds - business, government, academe and the public interest community - and the report reflects its diverse membership and robust deliberations, Coglianese said.

The report does not focus on any specific agency but instead identifies shortcomings that seem to be common across the regulatory spectrum, from agencies as varied as the Securities and Exchange Commission, the Environmental Protection Agency, and the Federal Communications Commission.

"If agencies are open about what they are trying to accomplish and why, and if they involve the public early in the process, we should expect better regulations that are viewed as more legitimate," explained Coglianese, who also is director of the Penn Program on Regulation.  "As it is now, agencies' stated rationales for their regulations often seem to many observers to be little more than after-the-fact rationalizations."

The report lists five major concerns about the current regulatory process and offers 12 recommendations to address them.  Among the concerns:

  • Insufficient transparency and public participation until too late in the process;
  • When input is sought, it too often is sought from only one side of an issue;
  • When comment is sought from multiple parties, agencies often do not involve all parties in the same conversations;
  • Agencies have not taken full advantage of the Internet to ensure timely public access to information.

      The panel's recommendations address transparency, public participation, and the strategic management of the regulatory process. The recommendations include:

  • Post on the Internet all records that are releasable under the Freedom of Information Act;
  • Provide more frequent online updates and improve searchability;
  • Allow public-interest groups to qualify for fee exemptions;
  • Clarify legal protections for whistleblowers;
  • Encourage agencies to experiment with interactive public comment processes;
  • Create a culture that promotes communications with external actors, so long as the existence of those communications is disclosed;
  • Take steps to ensure broad-based involvement early in the development of new rules;
  • Reduce barriers to the use of federal advisory committees;
  • Encourage agencies to develop and evaluate plans to improve public participation;
  • Adequately fund the Administrative Conference of the United States to evaluate and improve rule-making processes.