Regulatory capture is an opportunity for everyone
Evidence that a business seeking regulatory approval of its project enjoyed an apparently close relationship with the Kansas Department of Health and Environment should not be surprising.
Reporting in the Kansas City Star leads with “Hundreds of emails document that officials of a Kansas power plant enjoyed a cozy relationship with the Kansas regulators who issued them a building permit in December.” (Kansas agency, utility worked closely on permit for plant)
A press release from Earthjustice, the legal advocacy arm of the Sierra Club, proclaimed “A new report reveals Sunflower Electric (Sunflower) enjoyed a cozy relationship with Kansas regulators during the permitting process for the highly controversial coal-fired power plant Sunflower seeks to build in Holcomb.”
This incident — the details are not important for understanding the broad lesson — may be looked on as an example of regulatory capture. As defined in Wikipedia, “regulatory capture occurs when a state regulatory agency created to act in the public interest instead advances the commercial or special interests that dominate the industry or sector it is charged with regulating.”
In more detail, the Wikipedia article explains: “For public choice theorists, regulatory capture occurs because groups or individuals with a high-stakes interest in the outcome of policy or regulatory decisions can be expected to focus their resources and energies in attempting to gain the policy outcomes they prefer, while members of the public, each with only a tiny individual stake in the outcome, will ignore it altogether. Regulatory capture refers to when this imbalance of focused resources devoted to a particular policy outcome is successful at ‘capturing’ influence with the staff or commission members of the regulatory agency, so that the preferred policy outcomes of the special interest are implemented.”
Regulatory capture — or at least the heavy-handed attempt by special interest groups to influence public policy to fit their interests — is a non-partisan sport. We shouldn’t be surprised to see this form of government failure taking place at all times, no matter which party or politicians are in power.
As an example on point, the same type of activity happened during the administration of former Kansas Governor Kathleen Sebelius regarding the same electric plant that is the focus of controversy today. Her regulator, former KDHE Secretary Rod Bremby, denied the permit for the plant based on its carbon dioxide emissions, the first time that had been done in the United States.
Radical environmentalists rejoiced. Sebelius was invited to speak at an Earthjustice conference held in Denver in June, 2008. Here are a portion of her written remarks, as supplied to me at that time by her press office, thanking Earthjustice for all it had done in Kansas to help Sebelius and mold her regulatory regime:
When Big Coal pumped their money and politics into Kansas, EarthJustice was there to fight back:
- Provided litigation and public support
- Helped shape the media messaging and outreach
- Rallied supporters and engaged the public to get involved
It was a victory for all of us and I appreciate their help.
About that time Sebelius established the Kansas Energy and Environmental Policy Advisory Group, or KEEP. The activities of this group were managed — at no cost to the state — by the Center for Climate Strategies, a group that expressly advocates for energy policies and regulations based on an extremist view of climate science.
The invasion of Kansas — at least the Sebelius administration — by Earthjustice and Center for Climate Studies proves the point: Regulatory capture is a non-partisan opportunity.
This column is cross-posted from Voice for Liberty in Wichita.