Wednesday, May 13, 2009

The Industry-Regulator Revolving Door at IDEM

On its editorial pages this morning, the Indianapolis Star notes an appointment at the Indiana Department of Environment Management which raises a few eyebrows among those of us worried about revolving doors and conflicts of interest:

Hiring someone from a regulated industry to regulate that industry is a venerable governmental maneuver that was bankrupt the day it was born.

The rationale -- who knows the landscape better than the guy who's been working it? -- assumes that conflict of interest is a trifling concern and credibility with the public does not have to be earned every day.

When it comes to the Indiana Department of Environmental Management, this sort of tone-deafness is pretty much in-your-face.

IDEM's new assistant commissioner for the Office of Legal Counsel, in charge of riding herd on the state's worst polluters, is a former lobbyist and lawyer for the coal industry with a long history of fighting IDEM and the Department of Natural Resources over environmental enforcement.

David Joest has vast experience and knowledge of the coal industry, an IDEM spokesman says -- at the same time acknowledging that IDEM's mission covers
much more than that. Joest, the spokesman adds, would recuse himself from any case posing possible conflict and is unlikely to personally handle cases anyway.
While most good government reformers concentrate their attention on revolving door issues involving the legislative branch, it is in the executive branch positions where the revolving door between industry and regulator offers the most opportunity for abuse. Indiana has a weak executive revolving door law that only bars a former regulator from taking a job with a company he or she has taken regulatory action against for one year. It is a one way revolving door law and does not apply to people like Joest who come from an industry to the agency responsible for regulating that industry.

That executive revolving door also does not apply to someone like former FSSA director Mitch Roob who came from a company called ACS to FSSA and then as agency chief oversaw the implementation of FSSA's long term privatization contract with ACS. (See Advance Indiana's take on this arrangement.) While the Governor's Office says Roob recused himself from any decision to contract FSSA services to ACS, given that Roob was responsible for running FSSA and overseeing the contract with ACS, recusal cannot wipe out any conflict of interest.

The Indianapolis Star notes that the appointment of Joest raises troubling conflict of interest and other problems. Indeed it does. I have a high regard for Governor Mitch Daniels leadership, especially his stewardship over the state's budget during these difficult times. But the area where Governor Daniels has been the weakest, far and away, is the poor quality of many of his administrative appointments, his office's lack of oversight over those agencies, and a real tin ear when it comes to conflicts of interest.

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