An ongoing complaint about bureaucratic agencies - especially regulatory agencies - is that they are often staffed with individuals who have a background in the industry being regulated. This has the advantage of using people who have an understanding of the industry, and know where the bodies are buried, but it also creates an opportunity for a conflict of interest.
The appointees might be sympathetic towards the industry and not be overly harsh in its regulations. They also might expect to reenter the private side of the industry when their terms are up, so they want to keep their employment prospects open. No one will hire them if they are seen as enemies.
Here's the latest salvo on this front. It involves a recent Obama nominee:
Obsess all you’d like about President Obama’s nomination of Mary Jo White to head the Securities and Exchange Commission. Who heads the agency is vital, but important fights in Washington are happening in quiet rooms, away from the media gaze.
After a widely praised stint as a tough United States attorney, Ms. White spent the last decade serving so many large banks and investment houses that by the time she finishes recusing herself from regulatory matters, she may be down to overseeing First Wauwatosa Securities.
Ms. White maintains she can run the S.E.C. without fear or favor. But the focus shouldn’t be limited to whether she can be effective. For lobbyists, the real targets are regulators and staff members for lawmakers.
Ms. White, at least, will have to sit for Congressional testimony, answer occasional questions from the media and fill out disclosure forms. Staff members, however, work in untroubled anonymity for the most part. So, while everyone knows there’s a revolving door — so naïve to even bring it up! — few realize just how fluidly it spins.
This is highly recommended reading.
