How the Public Got Lubricated

Government regulators often draw from the same personnel pool of experience and expertise as the industries they regulate. Makes sense on one level; who knows more about a particular field than those who have trained for it and have generated real life experience from working in it? Some governmental agencies, state and federal, have rules about government workers leaving and then immediately joining the industries that they worked for; sometimes these rules apply just to lobbyists, sometimes there are no rules at all. But whatever the “rules,” in highly regulated industries, there is usually a routinized relationship between corporate representatives whose main function it is to interface with the government regulators and the regulators themselves. Sometimes it’s government workers who have switched sides and vice versa, and sometimes it is simply based on years of continuous interactivity.

When the regulators begin to think of the industry that they are assigned to regulate as “clients,” “customers” or “partners,” clearly this is part of a system gone very wrong. When the regulated are the ones drafting and approving the regulations, matters can go from bad to worse. Simply, there is no one representing the public, the taxpayers who are footing the bill for this “government service.” When the Minerals Management Service (MMS) was created in 1982, its very mandate created the seeds of a growing conflict of interest. Reacting to fears of an energy shortage, MMS was created to become the energy industry’s partner in streamlining the governmental bureaucracy to get mineral resources (including oil) front and center faster and with less interference. By reason of rents and royalties paid for mineral rights on government lands, MMS became second only to the IRS in generating revenues to the federal government. When pressure mounted against the agency, it was generally not about safety or the environment; the government wanted more money.

The August 24^th Washington Post summarized the MMS at the time BP’s Gulf oil leak took center stage: “MMS's acquiescence stemmed from the unusual relationship it had cultivated with industry. Directed by law to ‘meet the nation's energy needs,’ the agency pursued that mission by declaring itself publicly and formally as industry's partner… Top officials and front-line workers routinely referred to the companies under their watch as ‘clients,’ ‘customers’ and especially ‘partners.’ As the relationship became more intertwined, regulatory intensity subsided. MMS officials waived hundreds of environmental reviews and did not aggressively pursue companies for equipment failures. They also participated in studies financed and dominated by industry, more as collaborator than regulator. In the face of industry opposition, MMS abandoned proposals that would have increased costs but might have improved safety.”

Often, when MMS wrote mining and drilling regulations, it relied heavily on the drafting skills of lawyers employed by the mining and oil companies; the regulated were defining their own limitations with virtually no one speaking for the public: “Two weeks after BP's Macondo well blew out in the Gulf of Mexico, the federal government's Minerals Management Service finalized a regulation intended to control the undersea pressures that threaten deepwater drilling operations… MMS did not write the rule. As it had dozens of times before, the agency adopted language provided by the oil industry's trade group, the American Petroleum Institute, and incorporated it into the Federal Register.

“MMS received two favorable public comments about the regulation: one from the Offshore Operators Committee, an industry group, and the other from BP. The regulation stated: ‘BP, a large oil and gas company, expressed the importance of this rule and how they have been involved with MMS and industry to develop the industry standard.’… The fact that BP - which has come under withering criticism for how it managed mounting pressure in the Macondo well - took partial credit for crafting the rule is not surprising. MMS has adopted at least 78 industry-generated standards as federal regulations, American Petroleum Institute records show.” The Post. Is it a shock that the head of MMS was replaced after the Gulf oil spill?

And so this is the apparent track for American legislation and regulation: wait until there is a problem, react or over-react to the solution, let the “solution” wobble on without refinement for decades without review even as it seems to be veering strongly away from the public interest, and then wait for another catastrophe to revisit the situation. Leadership isn’t about asking your followers where they think they should be led – especially if the “followers” are overreacting and looking for sound-bite solutions – it’s about thinking, solving and understanding the long-term ramifications of hasty and ill-conceived planning.

I’m Peter Dekom, and thinking about a problem, communicating with the public and leading for the long term need to be reintroduced into the American political system.