More “Terrifying” Enforcement Please
Newsletter 121: Earth Day, the EPA, and Tools to Use Without Delay
On Earth Day 2021, President Biden affirmed his administration’s commitment to bold climate action that would set the world on a path to less than 1.5 degrees Celsius of warming. In the days leading up to this year’s Earth Day, in contrast, his Interior Department announced that it would reopen oil and gas lease sales on public lands. That’s bad enough. At least as alarming, however – if not more, quite frankly – is what his administration still isn’t doing to avoid catastrophic climate change. In The New Republic last week, Kate Aronoff outlined a menu of climate actions, none of which require wooing Joe Manchin. These include directing “the Federal Emergency Management Association to build distributed renewable energy…as well as limit fossil fuel development in areas that are vulnerable to climate change,” declaring a national climate emergency (allowing him to reinstate the crude oil export ban, cancel pipelines, and restrict new oil development), and using the Defense Production Act to “ramp up the production and deployment of heat pumps, solar panels, wind turbines and other clean energy technologies.”
And, on Monday, our colleague Mekedas Belayneh took to the pages of that same publication to add yet another option to the list. Using an oft-overlooked mechanism in the National Environmental Policy Act, the White House could halt the United States Postal Service’s disastrous plan to replace its aging delivery fleet with yet more gas-powered vehicles and take a big step towards fulfilling his promise to “use the federal government’s procurement authority to achieve a zero-emission fleet of government vehicles.” What’s more, as Mekedas emphasizes, EPA Administrator Michael Regan could use his authority under NEPA to help the White House challenge and, if need be, stop environmentally damaging projects across the federal government.
Corporate Crackdown
For all of our criticism, the Biden administration is making forward progress on important new rulemaking. On Tuesday, the Department of Energy finalized new lightbulb efficiency standards which will lead to the phase out of incandescent bulbs and “cut annual carbon emissions by 222 million metric tons over 30 years.” (This was one of many actions that Aidan Smith highlighted in the latest Corporate Crackdown report published on Friday.) And just last week, the White House announced that it had finished restoring standards for agencies’ environmental impact review under NEPA, after the Trump administration weakened the process's requirements.
These are worth celebrating. But, as our lede on the USPS makes clear, new rules will mean very little without a willingness to robustly enforce them. And, it is not yet clear that that willingness is there among the officials leading this administration. Sure, many have repeatedly indicated that they intend to reinvigorate white collar crime enforcement but, as a new analysis from Public Citizen underscores, we’re not yet seeing any hard evidence that that’s happening. Public Citizen observed that “only 90 corporations either pled guilty or were found guilty of federal crimes in 2021,” a new record low.
This is all the more alarming because corporate crime enforcement could be delivering benefits to regular people right now, even as the administration works to develop and finalize stronger regulations. Consider, for example, federal standards for long-term care facilities, which are in the spotlight this week thanks to a blockbuster Buzzfeed investigation into atrocious conditions at group homes operated by KKR-owned BrightSpring Health Services. Among the takeaways (beyond simply that private equity remains a scourge on society), the story makes clear that the country desperately needs federal standards that dictate minimum staffing levels for these facilities. Fortunately, the Biden administration announced that it would begin developing those standards earlier this month. But, as the Buzzfeed story makes clear, the administration should not wait for those to be finalized to take action to better protect the residents of these homes. The administration does have tools to better protect residents of these homes now, even if they aren’t as strong as it would like. It should make full use of them without delay.
Under the leadership of Lina Khan and Jonathan Kanter, the Federal Trade Commission and the DOJ Antitrust Division have been making clear that enforcers can be incredibly effective, even without new regulations. Indeed, without actually changing merger guidelines, Khan and Kanter have managed to “terrify” the antitrust defense bar. We’d like to see other federal enforcers make it their goal to be just as menacing to the industries under their jurisdiction using whatever legal authorities are at their disposal.
Governance
This tax season, the IRS has been "rescued" from "death" by new direct hiring authority, and is rapidly onboarding thousands of new employees to process 2022 tax filings. But the IRS still faces a $100 million shortfall for its operations this year, and a backlog of 6 million returns from 2021. While Republicans are pushing back against fully funding the IRS, claiming that the agency needs to become “more efficient,” the Congressional Budget Office’s report on IRS funding and efficiency shows just the opposite—that increasing “funding for the IRS by $80 billion over the 2022–2031 period would increase revenues by approximately $200 billion over those 10 years.” The Republican urge to hobble the IRS has far less to do with fiscal thrift than it does with the desire to protect the wealthy from an increase in audits.
In other words, Republicans would rather support tax fraud than increased government revenue from forcing the rich to pay their fair share of taxes. A competent political party would make something out of the Republicans' outrageous, anti-American sabotage of the system that funds our government.
Personnel
With the scent of Transition 2.0 sharp in the air, turnover among senior White House officials continues. Cedric Richmond is leaving his position as Biden’s senior advisor and director of the White House Office of Public Engagement next month to join the DNC as a senior advisor, purportedly with Biden’s blessing.
Four newsletters ago, we wrote about the influence of Anita Dunn within the Biden White House, and the ethics concerns raised by us last summer and the Washington Post last month about her stint as a “special government employee.” Dunn is now set to return again to the White House as a senior advisor and our ethics concerns haven’t gone anywhere. This time around, will she abide by basic standards like filing a financial disclosure and agreeing to a post-employment cooling off period?
Ian Sams, previously a spokesperson for Kamala Harris’s presidential campaign, will be joining the White House Counsel’s Office in a communications role. Sams is expected to be involved in fending off Republican-led “investigations” if one or both houses of Congress flip control.
Chief of Staff will be one of the most consequential changes for the White House, though Ron Klain’s departure from the role—the when, if not the if—remains uncertain. We put together a list of rumored contenders for the job, and our research (and qualms) about each. We’d love to hear from press and allies on this, and discuss our ongoing research.
Back in February, the Tech Transparency Project released a report on the “explosion of recent ‘revolving door’ traffic between federal institutions and the cryptocurrency sector.” Of the 235 individuals identified in the report for moving between government and the cryptocurrency industry, the Federal Reserve stands apart for hiring an increasing number of crypto professionals, while most other agencies have been seeing staffers leave for crypto companies. Recent coverage from American Banker and the Washington Post addressed the blatant conflicts of interest posed by the intensifying “crypto lobbying blitz” spinning the revolving door. Even the WaPo Editorial Board, which once scorned us for going after Jeffrey Zients, seems to be recognizing the risks of the crypto industry’s growing influence in Washington.
In happier Biden administration reshuffling news, former Obama-era EPA enforcement administrator Cynthia Giles is returning to the EPA as a senior advisor in the Office of Air and Radiation. Politico reports that Giles will be helping EPA Administrator Michael Regan “design regulations that will quickly reduce greenhouse gas pollution that's driving climate change.” We look forward to seeing the fruits of this collaboration, given Giles’ expertise with designing regulation for compliance, to minimize the complexity and cost of its enforcement. The EPA needs all the help it can get, with the Supreme Court entertaining the idea of sabotaging the agency’s capacity to regulate greenhouse gas emissions in West Virginia v. EPA this summer. As the UN warns that we’re “firmly on track toward an unlivable world,” the stakes could not be higher.
On Earth Day, climate activist Wynn Bruce self-immolated in front of the Supreme Court, in a heartbreaking act of protest to draw attention to the climate crisis. It is worth recognizing that the stakes of all of this—personnel decisions, regulatory design, legal interpretation, agency capacity—are often literally life and death. This should embolden us to insist upon integrity and ethics in decision-making at all levels.
Congressional Oversight
The New York Times Editorial Board recently spotlighted the urgent need for patent reform, and recognized the serial revolving door issues undermining the efficacy of the United States Patent and Trademark Office. They highlighted in particular the brazen conflicts of interest of Trump appointee Andrei Iancu, who directed the USPTO from 2018 to 2021. Under Iancu’s leadership, “the patent office used its discretionary powers to deny a challenge to a patent held by a company that his former law firm represented. He then returned to that firm as soon as his time in government was up.”
On Monday, Revolving Door Project colleagues Max Moran and Fatou Ndiaye wrote in The American Prospect about the role Congress can play in pushing patent reform. “You’d think members of Congress would recognize the political salience of picking a fight with one of the most hated industries in America,” they write, given that majorities of both Democratic and Republican voters want lower drug prices. Max and Fatou argue that there could be ample political rewards for Senate and House IP subcommittee members who choose to strengthen their oversight of the abhorred pharmaceutical IP system.
Independent Agencies
From the moment President Biden took office, we have consistently sought to emphasize that delays in naming and confirming nominees to vacancies at independent agencies undermine the President’s agenda and harm regular Americans. We have, however, admittedly spent less time highlighting how a dysfunctional nomination and confirmation process benefits corporate bad actors. Lucky for us, their representatives are stepping in to do that work for us. Last week, in a letter to Senate leadership, the U.S. Chamber of Commerce asked that the Senate further delay consideration of Alvaro Bedoya’s nomination to the Federal Trade Commission. The subtext? The Chamber is more than happy for the commission to remain gridlocked (and Lina Khan’s hands tied) for the foreseeable future.
Fortunately, it would appear that that appeal did not work; Senate Majority Leader Chuck Schumer has promised a vote on Bedoya’s nomination this week. But he should not stop there because Bedoya’s is surely not the only stalled independent agency nomination that the business community is celebrating. Schumer should do everything possible, up to and including changing Senate rules, to accelerate confirmations for all pending independent agency nominees.
Want more? Check out some of the pieces that we have published or contributed research or thoughts to in the last week:
How Biden Can Halt the U.S. Postal Service’s Gas-Guzzling Plan
Where’s the Congressional Champion on Pharma Patent Abuses?
We All Know Elon Musk Is Buying Twitter To Help Him Get Away With Stock Fraud, Right?
What You Need To Know About The Contenders For Biden’s Next Chief Of Staff
Corporate Crackdown Updates: 4/25/22
How The Department Of Commerce Can Combat Economic Malaise
Justice pledging white-collar crackdown
Greens give Biden’s Fed pick the silent treatment
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