Part One of Two Parts
The TakeAway: SEC Opens Door Further to Public Engagement as Ex-Regulator Lobbyists Rush In
Two developments late yesterday demonstrate the high stakes involved when it comes to money and power, and vividly illustrate the imbalance between those whose money it is (we, the taxpayers and beneficial owners), and those whose narrow interests are often over-represented. The Founding Fathers would be outraged. Will we, the people, respond? And how can the use of digital tools and Open Government combat the firepower of highly-paid lobbyists and special interests?
Yesterday, the SEC announced a special open process for rulemaking in connection with Dodd-Frank provisions on financial reform. A few hours later, the New York Times reported that a lobbying blitz of ex-regulators was mobilizing to descend upon agencies on behalf of corporate clients. The SEC and the arsenal of lobbyists represent two very different notions of transparency and openness, with consequences that will affect millions of people.
Why the flurry of activity? Over the next few months, regulators in agencies across the Obama Administration will translate the governance and financial reform measures recently signed into law by the President into policy and practice. As we reported last week, this is the largest wave of rulemaking since the 1930s, involving at least 243 rules spread across 11 Federal agencies, with 95 at the SEC. Chief among these are new rules enabling shareholders to nominate candidates to director boards (“proxy access”) and have an advisory vote on executive compensation (“Say-on-Pay”).
“It has not even been a week since the President signed the regulatory reform legislation into law, but at the SEC we are already working to fully implement the dozens of studies and rulemakings required of our agency,” said Chairman Mary Schapiro. “We recognize that the process of establishing regulations works best when all stakeholders are engaged and contribute their combined talents and experiences. We look forward to preliminary public comments in these areas.” Typically, the official comment period begins when notice of the initiative appears in the Federal Register, but in this case, the SEC is making an exception due to the significance and scope of rulemaking involved.
How does the public stand a chance of being heard, with all those lobbyists swarming around rulemakers?
Let us count some of the ways. According to Schapiro, the SEC will:
- solicit public comment “before rules or amendments are even proposed as well as to see what others are saying to the agency about these issues”;
- “reach out as necessary to solicit views from affected stakeholders who do not appear to be fully represented by the developing public record on a particular issue”;
- follow “newly-established best practices when holding meetings with interested parties in order to ensure full transparency to the public”;
- meet with any interested parties seeking a meeting. When the number of requests exceeds availability, the staff will seek out parties with varying viewpoints;
- limit, if necessary, the number of meetings with similarly situated parties; and
- limit multiple meetings with the same party.
The SEC also has a dedicated website for public comment on measures related to Dodd-Frank, Shapiro said, to which all submissions can be posted. They are not edited or changed, and so the public is urged “only to make submissions that you wish to make available publicly.”
So while lobbyists muster and government prepares for public comment, there are digital outlets for vox populi. In Part Two tomorrow, we’ll take a look at what citizens and shareowners can do with digital weapons of mass communication, within the broader context of Open Government initiatives intended to increase transparency, accessibility, and accountability.
