The OIRA Transparency Problem, by Peter Strauss

by Guest Blogger — Tuesday, Nov. 22, 2016

Peter StraussAmong the ABA AdLaw Section’s recommendations in its bi-partisan Report to the President-Elect sent to both candidates before the election was this one concerning OIRA’s administration of Executive Order 12,866:

Third, we urge you to ensure appropriate transparency in White House oversight of agency rulemaking through OIRA. From their beginning, the Executive orders creating a system of centralized executive review of agency rulemaking (e.g., Executive Order 12866) have included openness provisions supporting public trust in their administration.  These provisions have:

  • Committed OIRA to providing public notice of matters under review, communications and meetings with persons outside the administration, timely action on matters submitted for its review, and eventual publication of all documents exchanged between OIRA and the agency during the review process.

  • Committing agencies to reveal its drafts submitted to OIRA for review; and “complete, clear and simple” identification of substantive changes between these drafts and its actions subsequently taken, including identification of changes made at OIRA’s suggestion or recommendation.

Adherence to these commitments both by OIRA and by acting agencies would contribute to public understanding and trust of this important process, offering some assurance against its being used in ways inconsistent with its promises of objective review. We urge you  to adhere to these commitments.  Assiduous avoidance of delays and respect for openness are important elements for creating public trust in the process of centralized regulatory review.

Prior administrations have not treated these commitments with the respect they deserve.  In 2010 scholarship principally addressing the Clinton and Bush administration’s practices, Prof. Nina Mendelson reported:

[P]ublic information about the content of executive supervision of an agency decision itself, such as through regulatory review, is surprisingly rare. . . . During the Clinton Administration, regulatory review documents and data were “not searchable, incomplete, and difficult to understand.” Nonetheless, presidential influence was apparently very significant during that period. “Of the rules reviewed by the Clinton OMB, the percentage approved without change sharply decreased from prior years, the percentage approved with change increased proportionately, and the small percentage either returned to or withdrawn by the initiating agency remained roughly constant.” According to a recent presentation of data from the Congressional Research Service, the Clinton OIRA, by the end of Clinton’s term in office, was permitting fewer than 40 percent of significant agency rules to proceed without change. . . . [D]espite the several hundred economically significant rules that were modified during the review process, the Bush Administration OMB posted only forty-two review and return letters that explain its problems with the agency rule under review. President Obama’s OIRA appears to be even less committed to disclosure. . . . Between January 20, 2009 and January 20, 2010, Obama’s OIRA reviewed 120 economically significant proposed or final rules. Of these, only 8 were issued without change; 46 were issued consistent with change; and 12 were withdrawn. In other words, over 90 percent of economically significant rules underwent some change or withdrawal during the OIRA review process. . . . . [Yet] no review or return letters of any sort appeared to have been posted electronically by Obama’s OIRA during that time.

A striking subsequent example was reported to me by Curtis Copeland, a respected former civil servant with GAO and then the CRS, who after his retirement drew on his experience and contacts to create a number of reports about executive-agency relations for the Administrative Conference of the United States.  He called my attention to a September 3 article that had appeared in the New York Times.  It included this:

Another critical assist came from Andrew Perraut, who until 2014 served as a desk officer at the Office of Management and Budget division that reviews major federal regulations, including the F.D.A.’s tobacco rule. White House records show that he helped represent the Obama administration at more than a dozen meetings with outside parties, mostly pressing the government to ease the rule, before he was hired by a cigar-industry trade organization and by NJoy, a manufacturer of e-cigarettes.

Within less than a year, records show, Mr. Perraut was back at the Office of Management and Budget on the other side of the table.

Because Mr. Perraut was not a senior official and the regulation affects numerous industry players, federal revolving door rules did not apply, an agency spokeswoman said. Mr. Perraut said he was simply trying to help stop a “train wreck” that will be caused by the F.D.A. overreach.

“So,” Mr. Copeland remarked, “an OIRA desk officer does good (for himself).  And it appears that there is no prohibition regarding this.” He continued[1]:

At first I thought that federal post-employment conflict of interest restrictions in 18 USC 207(a) would apply.  The law essentially says that former federal employees (at any level) can’t represent anyone else back to the federal government regarding any ‘particular matter’  that involved ‘specific parties’ that the former employee participated in “personally and substantially” as an employee.

Although the statute (18 USC 207(i)(3)) specifically defines a ‘particular matter’ to include rule making, the statute says that a violation has to involve ‘specific parties’ (which general applicability rule making rarely does).  The OGE regulations on this issue (5 CFR 62641(h)) make it clear that rule making is not covered.  Also, it looks like OGE has been pretty clear that the prohibitions in 18 USC 207(a) do not apply to rule making because of the language stating that the issue must involve ‘a specific party or specific parties.’  See top of p. 4 of this memo:

So a person can work on the development and approval of a rule (including OIRA desk officers), leave the government on a Friday, and then represent parties back to the government on the same rule the following week.  And probably make tons of money doing so. . . .

I looked at the meeting records for this rule and from November 2013 to April 2014, Mr. Perraut was the OIRA desk officer at 34 of 36 OIRA meetings on the FDA proposed rule.  Almost all of these were with representatives of/lobbyists for the tobacco/vaping industry. (Notably, the only ones he missed were two meetings with the American Cancer Society and Tobacco Free Kids.)  The proposed rule was published in April 2014. He left OIRA in August 2014, formed his own consulting firm, and then represented the tobacco/vaping industry back to OIRA at four meetings between November 2015 and January 2016 on the final version of the rule.  In total, there were 58 meetings at OIRA with outside groups on the final rule between November 2015 and February 2016.  So on both the proposed and final rule, OIRA had 94 meetings with outside parties.  Don’t know if this is a record, but it has to be close.

The Trump administration has come into office with repeated promises to “drain the swamp,” and improving OIRA’s transparency, while imposing on its civil servants the obligation not to act as Mr. Perraut apparently has, reflect two channels by which it might begin to accomplish that Herculean task.  But, as may be apparent from the foregoing, the track record of his predecessors, Republican and Democrat, is hardly promising.

 

Peter L. Strauss is the Betts Professor of Law at Columbia Law School.

 

[1] Email of Nov. 17, 2016, on file with the author.  For another story, see Peter l. Strauss, Response, 164 U. Pa. L. Rev. Online 293, 301-304 (2016).

 


This post is part of the Symposium on the ABA AdLaw Section’s 2016 Report to the President-Elect. An introduction to the symposium is here, and all of the posts are collected here. The views in this post, which expand upon the recommendations set forth in the Report, are the author’s own and do not necessarily reflect the views of the ABA AdLaw Section. The full Report is available here.

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