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Wang: ‘Swing Door’ Is Good for the Political System

The past few months have not been good ones for consumer and worker safety. The recall of millions of potentially runaway Toyotas and the tragic deaths at a West Virginia coal mine that had been cited for hundreds of safety violations have cast a cloud of scrutiny over the National Highway Traffic Safety Administration and the Mine Safety and Health Administration.

[IMGCAP(1)]In the wake of both events, the Washington Post ran front-page articles citing the hundreds of former NHTSA, Transportation Department, MSHA and Congressional officials and staffers who are now employed as lawyers, consultants and lobbyists for the auto and coal industries. Conversely, the Post cited many former industry employees who now work as regulators or policy staff overseeing their erstwhile employers. In Congress, some Members have called for stricter revolving-door regulations to address these concerns.

The obvious implication of these articles and proposals is that the regulators and regulated community have an excessively cozy relationship and that this relationship benefits private industry. However, this spin on the revolving door is overly simplistic, and any legislation that flows from it runs the risk of being reactive instead of being responsive to any legitimate regulatory problems that may exist.

First, to the extent that revolving doors turn in only one direction (implicitly, in this case, in favor of industry), the metaphor may be inaccurate. While regulators who came from industry may favor their former employers, the opposite also can be true. The motivation to “do good” still seems to be a major incentive to work in government, and thus the more appropriate metaphor may be that of a “swing door.” That is to say, the door can swing in favor of either the private or public interest.

This point is driven home by the whistle-blowers in many of the notorious industry meltdowns recently, such as Enron’s Sherron Watkins (a Time “Person of the Year” in 2002) or Brown & Williamson Tobacco’s Jeffrey Wigand (the basis for the movie “The Insider”). Indeed, former Toyota in-house lawyer Dimitrios Biller, who claims the automaker sat for years on extensive evidence of product safety defects, has emerged as the latest whistle-blower. Proponents of stricter limits on government hiring from the private sector should ask themselves: Do they really want to stop employees with insider knowledge of intimate trade secrets from going into regulatory agencies?

Even if most industry employees who “switch sides” are not motivated by a desire to turn against their former employers, they still bring with them a wealth of practical knowledge. Their experience with the regulated community informs public policymaking and regulation. For example, they have a better understanding of common industry practices. If such practices are adverse to the public interest, an agency can better regulate them based on that understanding. Conversely, if an industry has effective self-policing for certain problems, an agency’s knowledge of that fact may lead it to allocate resources more efficiently by focusing on other issues. Moreover, it serves nobody’s interest for an agency to pass regulations with which compliance is impractical or impossible, and former industry employees have the best understanding of commercial practicability.

Looking at the “swing door” from the other direction, having former government officials advising private industry on how to comply with regulations would also seem to be a net positive. For example, the Post cited Toyota’s recent retention of former Secretary of Transportation Rod Slater. Presumably, Slater was appointed to the Clinton administration for his competence and integrity, not to mention his experience. During his tenure, Slater also presumably developed great expertise on transportation safety issues. Why wouldn’t we want someone like that advising an automaker?

Similarly, the Post cited former Rep. Dick Gephardt (D-Mo.), who is now a coal industry lobbyist. But Gephardt was universally known as one of labor’s most prominent advocates during his career on the Hill. Critics surely must realize the industry could have done a lot worse.

Lastly, the revolving door is not a two-way street. Rather, it is more like a four-way intersection. That is to say, not only do industry employees go into government and vice versa, but labor officials and public interest advocates also enter the mix. Stricter revolving-door restrictions may inadvertently keep members of the latter groups out of government, as the Obama administration discovered when it summarily banned the White House from hiring lobbyists of any stripe.

Recognizing that we don’t live in a binary, industry-vs.-government universe is perhaps key to averting an overbroad approach to the revolving-door issue with unintended consequences. The solution, to the extent a problem exists, is not to wall off the government from all outside influences. Rather, Congress and the White House, through the appointments process, must work to ensure that government service welcomes all stakeholders, with no one interest dominating over the others.

Eric Wang, a political law attorney, has advised clients on all aspects of government ethics laws. He can be reached at ericwang@alumni.princeton.edu.

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