Politico

White House moves to curb policing of corporate misbehavior


The White House is taking action to rein in enforcement activity by government agencies, calling for more input by political appointees and advising against opening more than one probe into the same company.

When it comes to investigations and actions against companies for regulatory violations, any ambiguity in the law should be read “in favor of the targeted party,” according to a memo issued last week by Paul Ray, who heads the White House’s regulatory review office.

The move comes in response to concerns by companies that government investigators wield too much power, but it has sparked criticism from government watchdog groups that it will handicap the oversight of wrongdoing by corporate America. Enforcement has already been steeply declining under the Trump administration for years, they say.

“We’ve seen regulatory enforcement drop to historic lows across agencies in the Trump administration,” said Amit Narang, regulatory expert at the public interest group Public Citizen. “So, I don’t see it as a shift in priorities, but more as like a codification of what is already the policy.”

The memo applies to a broad swath of enforcement activity, including vehicle safety, fair housing and environmental and labor protections.

It doesn’t address independent agencies like the Federal Reserve, Securities and Exchange Commission or the Federal Communications Commission, which don’t answer to the White House. But it implements a section of an executive order issued by President Donald Trump in May, which seems to cover those agencies as well.

The White House doesn’t have the ability to compel independent agencies to go along with the guidance, but they are run by Trump appointees.

The memo says investigations should take place within a specified timeframe and urges agencies to eliminate “multiple enforcement actions for a single body of operative facts.”

“The initiation of investigations and enforcement actions should carry the structural protection of requiring approval of a [political appointee] or, if necessitated by good cause, his or her designee,” according to the document.

The memo calls on executive agencies to issue any rules updating their enforcement practices by Nov. 26 with a request for public comment.

“President Trump’s executive order upholds the rule of law, presumption of innocence and independent adjudication,” a spokesperson for the White House budget office, which houses the Office of Information and Regulatory Affairs, said in a statement.

“These principles protect both individuals and small businesses while at the same time enforcing the law against wrongdoers. Providing a fair process for all Americans is what’s at the heart of this executive order,” the spokesperson said.

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