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Life In The Administrative State – Part 2 of an Occasional Series

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A couple of weeks ago I started sharing stories of my life dealing with the “administrative state.”  I would like to continue that today by looking at what I call “the petty power play.”  Now, everybody has experienced the petty power play at some point in their lives.  That worker at the DMV that simply does not move faster than molasses in January, despite people lined up out the door and down the block – that’s a petty power play.  They are more interested in showing you it’s their world and you are just visiting than they are in serving you.  The petty power play is abundant in dealings with the TSA.  Like I say, everybody has experienced it to some extent.

But when you enter the world of regulation it gets much worse.  Sometimes what seems like a petty power play is just a function of confusion.  Yes, even the regulators are confused by their regulations. Sometimes what seems like a petty power play is a lack of training – the person you are dealing with does not sufficiently understand what it is they are supposed to be doing.  But sometimes it just is a naked power play.  I want to look at three examples

The first example is analogous to the slow-moving DMV worker, but sadly far more consequential.  Business submissions to the government, whether in the form of an application of some sort or simple reporting can be voluminous.  Documents of fifty to one hundred pages are quite routine and submissions with page counts in the many hundreds are common.  Any company dealing with that much information is going to want to do whatever it can to streamline the handling of that information.  Government submission is pure overhead to any company; the lower the overhead, the higher the profitability – they are going to do whatever they can to reduce the cost of producing those submissions.  Unfortunately, government cannot keep up.  For example, the federal government is still on the Windows 7 operating system.  (Windows 10, which the rest of the world is on, is yet to pass government security requirements)  Thus many information processing tools available to business are not available to the government, and thus a business must retard its information processing capabilities to mesh with the government.  This situation is grossly complicated by the fact that the part of the government that is responsible for working with Microsoft to get Windows 10 cleared is so remote from the agencies that are trying to interface with business that they feel none of the pressure to move forward.  And so, like the DMV worker, they trudge at their own pace.  It’s kind of like this.

A second area where the petty power play comes up is when two agencies are competing for “territory.”  Let me give you an example.  Tanks, when they contain hazardous materials and wastes, are heavily regulated.  But depending on how they are situated they are regulated by different agencies.  If they are underground, like the tanks of gasoline at your local filling station, they are regulated by Agency 1.  But if they are above ground they are regulated by Agency 2.  Seems clear enough does it not?  Well, not necessarily – what if the tank is in a basement – is that above ground or underground?  The rules are very different for the two, so it is vitally important which it is.  It should also be remembered that each tank regulated represents revenue to the agency that regulates it – either as more budget money because they need more people to oversee them or as more fees charged of the regulated community, or both.  Believe me, the agencies are going to compete over who gets to regulate tanks in basements.

Now suppose you have such a tank in your basement.  Further suppose both Agency 1 and Agency 2 have approached you and told you are regulated by them and you have X number of days to achieve full compliance before they will bring you under enforcement.  What are you going to do?  The rules are such you cannot comply with both, you have to choose.

One last example of the petty power play – agencies regulating other agencies.  In this case Agency A passes rules that require Agency B to control some regulated community.  Typically Agency A would be a statewide agency of some sort and Agency B would be a local, city or county, agency – or it could be the federal government regulating state agencies.  Further, one way Agency A makes sure Agency B is doing what it is supposed to is by inspecting members of the regulated community.

Now suppose Agency A decides some situation at a member of the regulated community is a violation – how do things proceed?  Should Agency A pursue the matter with Agency B who would then address it with the member?  Doesn’t that seem reasonable?  But that is not always what happens.  Sometimes Agency A will pursue enforcement action against both the member and Agency B.  Thus it is possible for the member of the regulated community to undergo administrative enforcement for the same actions from both agencies.  And both have a vested interest in doing so since any monies collected as a result of those actions enhance their coffers.  And this really gets complicated when one considers that hiring a lawyer to untangle this knot only increases costs to the member.

The point of these stories is that in the administrative state the petty power play is not always so petty.  The consequences are real, expensive and often inconclusive.  The net result is often that a member of the regulated community has expended a large amount of resources and never developed a clear picture of precisely what is required of it.


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