How to end corporate capture of the regulatory process

It’s the most important legislation you’ve never heard of. Rep. Pramila Jayapal (D-Wash.), chair of the Congressional Progressive Caucus, recently introduced the Stop Corporate Capture Act, landmark legislation to strengthen one of the most crucial areas of federal policymaking: the rulemaking process.

Rulemaking is the process government agencies use to create regulatory protections for workers, consumers, civil rights, public health, and our environment. With Congress increasingly gridlocked and unable to pass legislation on the most pressing issues due to abuse of the Senate’s filibuster, many of the policies aimed at addressing big ticket crises like climate change, economic inequality, and protecting public health during the pandemic will be regulations.

We need a process for creating rules that works for the public, but that’s not what we currently have. Right now, corporations dominate the rulemaking process. The problems are deep and structural, persisting no matter which party controls the White House.

Numerous studies have shown that corporate lobbyists hold more meetings with agency officials, submit more comments, and bring more legal challenges against regulations than public interest groups or ordinary citizens. Naturally this intensive lobbying and pressure results in more corporate-friendly rules.

The Stop Corporate Capture Act includes a series of bold and aggressive structural reforms that would roll back corporate influence over the rulemaking process, increase transparency around agency actions, clear various industry-backed roadblocks and bottlenecks that thwart public protections, empower the public to hold agencies accountable for enforcing the rules, and build a foundation for including social equity considerations in rulemaking.

First, the legislation would ensure consumers, workers, and regular people get a seat at the rulemaking table by establishing an Office of the Public Advocate, which would be the voice of the public in the rulemaking process. It’s critical that agencies hear from those of us who would benefit from new regulatory protections — not just corporate lobbyists that want to dilute, delay, and deny stronger safeguards. The Office of Public Advocate’s core mission would be to reduce corporate capture by increasing the influence of the public.

Second, the legislation would prevent corporations from misleading agencies or challenging agency science with bogus studies — a tactic repeatedly used by Big Tobacco, Big Oil, and others. Currently, corporations can submit comments on new regulations that include sham studies and reports without disclosing how they were funded. The bill would require the disclosure of funding sources and any conflicts of interest connected to studies sent to agencies for consideration. Agencies would be prohibited from considering studies that haven’t been peer reviewed and got 10 percent or more of their funding from regulated industries.

Relatedly, the bill would increase criminal penalties when corporations talk out of both sides of their mouths — exaggerating the costs of new regulations in comments to agencies, while privately telling shareholders these same regulations won’t be so costly. Corporations have an incentive to inflate the costs when lobbying against regulations, but they’re legally obligated to be truthful with shareholders. Businesses need to be held accountable when they lie to regulators.

Third, the bill would remove loopholes and bottlenecks that corporations exploit to delay and block public protections. For example, the bill would bring much-needed transparency and accountability to the U.S. Office of Information and Regulatory Affairs (OIRA) — the federal clearinghouse for regulatory activity — which historically has weakened and blocked new consumer, worker, and environmental protections in response to corporate lobbying. The bill also would make rulemaking more efficient by putting OIRA on the clock to complete its regulatory reviews.

Fourth, the legislation would stop the U.S. Supreme Court from overturning new regulatory protections based on fringe legal doctrines, as the court recently did when it prevented the government from protecting workers against COVID. The bill would make sure the Supreme Court follows the longstanding and commonsense principle that Congress passed laws giving agencies the authority to decide important policy matters — not the courts. Finally, the bill would empower everyday Americans to bring citizen lawsuits holding government agencies accountable for failing to enforce the law when corporations get caught violating the rules.

The roadmap to improving and strengthening the regulatory process runs through the Stop Corporate Capture Act. It’s time for Congress to fix the regulatory process by reducing corporate domination and increasing the influence of consumers, workers, and everyday Americans. 

Kent is the regulatory policy associate at Public Citizen. Narang is the regulatory policy advocate at Public Citizen.