CORPORATE CRIME REPORTER
BP,
Massey, Toyota and the Failure of the Regulatory State
24 Corporate Crime Reporter 23(12), June 9, 2010
Massive BP oil spill in the Gulf of Mexico.
Twenty-nine coal miners dead in a Massey Energy mine in West Virginia.
Eighty-nine people dead as a result of Toyota sudden acceleration crashes.
Why?
The regulatory state is in shambles.
That’s the take of Rena Steinzor.
She is a Professor at the University of Maryland School of Law.
And she is President of the Center for Progressive Reform.
She is also co-author with Sidney Shapiro of a new book – The People's Agents and the Battle to Protect the American Public – Special Interests, Government, and Threats to Health, Safety, and the Environment (University of Chicago Press, 2010).
Why is the regulatory state in shambles?
“The agencies have drastic shortfalls in funding,” Steinzor told Corporate Crime Reporter last week.
“Take the Occupational Safety and Health Administration. They don’t have enough inspectors to visit all of the workplaces in the United States more than once every 130 years.”
“The shortfall in funding is a huge problem.”
“The agencies don’t have sufficient legal authority. So, for example, the Food and Drug Administration cannot order that products be seized off the shelves if they are dangerous. They have to depend on voluntary action by industry.”
“The National Highway Traffic Safety Administration has been captured by the automobile industry. They didn’t have anyone working on what is called drive by wire – the trend toward converting all of these automobiles into computerized systems to control steering and acceleration.”
“And that is now thought to be one of the major culprits in the sudden acceleration of Toyotas.”
“We’ve had eight million cars recalled. And recently, a story came out estimating that as many as 89 people may have died in those accidents.”
Steinzor says that people within the regulatory agencies are demoralized.
“People in the agencies are demoralized because for years, Congress has been bashing the bureaucracy,” Steinzor said.
“To give you an extreme example, Tom Delay compared the EPA staff to Nazi Gestapo.”
“They’ve been kicked around the block, accused of being incompetent, of goldbricking on the public’s dime. And that has been demoralizing. Many of the most qualified people have left.”
“There was a steady drumbeat saying in effect – we don’t need more regulation, we can trust industry to take care of these problems.”
“This assertion is now being disputed every day. I hope we have a reexamination of that whole idea. But we’ve been hearing it ever since Ronald Reagan was President.”
“So, there is a lot of ingrained muscle memory to overcome.”
What to do?
“We need to give these agencies more money. I would hasten to add, it’s not a lot more money. If you add up the budgets of all of the health and safety regulatory agencies, it comes down to .1 percent of the federal budget.”
“They can leverage relatively meager resources through very strong enforcement. That gives a strong deterrent against bad conduct. That’s why the emphasis on criminal prosecution is important in that regard.”
“We need to stop bashing the civil service. Some of the most expert of the civil servants don’t get paid even close to what folks get in the private sector.”
Steinzor says that with BP, Toyota, and Massey Energy, the tide is turning.
She predicts that BP and Massey executives will go to jail.
“Even though we haven’t seen major American corporate executives in jail for these kinds of disasters – since when?”
“The straw has broken the camel’s back,” she says.
[For a complete transcript of the Interview with Rena Steinzor, see 24 Corporate Crime Reporter 23(12), June 7, 2010, print edition only.]
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