Trump Moves Swiftly to Influence Independent Agencies

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By Martina Barash

Rules covering leadership positions at the government’s independent regulatory agencies cloud President Donald Trump’s legal authority to remove and replace one of the biggest targets for conservatives—Richard Cordray, the director of the Consumer Financial Protection Bureau.

But those same rules have also allowed Trump to act quickly to install Republicans as new acting chairs at many other independent regulatory agencies.

Those changes in agency leadership, in some instances, have been carried out much more swiftly compared to Trump’s recent predecessors.

The replacement of sitting leaders at the agencies Trump has acted on is legal and, indeed, expected after a change in party in the White House, some law professors and attorneys say.

But the “acting chair” changeovers—most of which will require eventual confirmations by the Senate to convert them to regular chairmanships—have been particularly fast and thorough this time, according to a Bloomberg BNA analysis.

The swift transitions, some involving the forced ouster of Democratic carryovers from the Obama administration, others involving replacements after Democrats resigned, almost all occurred within a week of when Trump took office.

Trump’s fact action in replacing these leaders indicates a president eager to change the direction not only of the executive departments under his direct control, but also of those agencies designed to generally be more autonomous.

“Clearly, he’s acting quickly to put his stamp on things—not just on this but on everything,” Professor William S. Jordan III of the University of Akron School of Law told Bloomberg BNA in a recent interview.

An example of how fast an independent agency can switch its broad policy positions under new leadership to align with those of a new president’s can be seen with the change at the Consumer Product Safety Commission.

Soon after Trump’s Jan. 20 swearing-in, then-CPSC Chairman Elliot Kaye, a Democrat, said he wouldn’t follow the president’s executive order requiring federal agencies to cut two rules for every new one introduced.

It doesn’t apply to independent agencies, and would run counter to the agency’s safety-related priorities, Kaye said Feb. 2.

But a week later, on Feb. 8, Trump replaced Kaye with Acting Chairman Ann Marie Buerkle (R). On her first call with reporters the following week, Buerkle reversed Kaye’s position on Trump’s anti-regulatory stance.

She said she was inclined to “comply with the spirit” of Trump’s “two-out-one-in” executive order.

Moving Fast on Replacements

The Council of Independent Regulatory Agencies, part of the Administrative Conference of the United States, lists 21 commissions, boards and other agencies as members.

A review of all 21 of those agencies shows that Trump has named Republican chairs or acting chairs for at least 14 of them.

In addition to the CPSC, the changeovers have occurred at such independent regulatory agencies as the Securities and Exchange Commission, the Equal Employment Opportunity Commission, the Federal Communications Commission, the Federal Energy Regulatory Commission and the Federal Trade Commission.

All but one of those replacements, the CPSC chair’s, occurred within five days of the inauguration.

In a few cases, the Democratic leader announced his or her resignation in advance of the inauguration.

For example, SEC former chairman Mary Jo White–who, like the Consumer Financial Protection Bureau’s Cordray drew criticism from conservative Republicans as being too aggressive on the regulatory and enforcement fronts–announced after the election that she would resign.

So did former FTC chairman Edith Ramirez.

A confirmation hearing on Trump’s nomination of Jay Clayton for the full-time SEC chairmanship is slated for March 23. The president has not yet named a nominee for the full-time FTC slot.

Sometimes Faster Than Bush, Obama

A closer look at how soon some of these same agencies changed leaders under the administrations of former Presidents George W. Bush and Barack Obama, who each took over in a party change, puts the speed of the changeovers in perspective.

Both of those former presidents made some replacements immediately after they took office. But others occurred many weeks, or several months or more, later.

Under Bush, who became president in January 2001, a Democratic chairman at the Federal Trade Commission handed the gavel to a Republican five months later.

Obama switched the same agency’s helm back to a Democrat in March 2009, two months after taking office. That was much quicker than Bush, but still significantly later than Trump.

At the Surface Transportation Board, Bush asked the chairman to stay on, finally replacing her in December 2002. Obama moved at the same speed as he did with the FTC, again replacing the chairman with an acting chairman in March 2009.

CPSC Provides Stark Example

The CPSC is another example of an agency that experienced later chairmanship transitions under Bush and Obama. In fact, much later.

After Bush became president in 2001, Democrats served as the chair and acting chair of that agency until August 2002, more than 18 months post-inauguration, attorney and consumer advocate Pamela Gilbert told Bloomberg BNA.

Gilbert, of Cuneo Gilbert & LaDuca LLP in Washington, served as the CPSC’s executive director during the Clinton administration and led Obama’s transition team for the CPSC, according to her firm’s website.

And a Republican served as acting CPSC chairman under Obama until the end of May 2009.

Some, including Gilbert, say fast leadership changes are not in the independent agencies’ best interests.

“I think it’s extremely unusual to be in such a hurry to make sure the leadership changes to the president’s party, and it’s really not, in my view, the way independent agencies are supposed to work,” Gilbert said.

Gilbert characterized the slower, prior transitions into new leadership at the CPSC and other independent agencies as “more evolutionary” and “more respectful of the independence of the agencies.”

But others say these kinds of leadership switches are expected.

“The protocol in Washington for my entire experience” is that “you need to recognize the change in political leadership after an election,” said attorney Charles A. Samuels of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo P.C. in Washington. Samuels represents companies regulated by the CPSC.

Moves Swift, But Legal

And legal scholars and others interviewed by Bloomberg BNA agreed that, while the particular rules vary among the agencies, Trump’s to-date replacements of independent-agency leaders have been legal.

Independent regulatory agencies are created by Congress, according to the Congressional Research Service. They “share several traits that arguably insulate the agencies from the President’s direct control,” according to one CRS report.

Those traits include removal of commissioners only “for cause,” and the ability to make rules without review by the White House Office of Management and Budget.

Professor Andy Popper of American University’s Washington College of Law distinguished the situation of independent regulatory agencies from executive agencies such as cabinet-level departments.

In an independent agency, the removed commissioner would have to have a commissioner’s seat to go to, said Popper, who serves on the Bloomberg BNA Product Safety and Liability Reporter’s advisory board.

By contrast, the secretary of an executive agency is removable at will, he said.

Some questions about removing an independent regulatory agency leader “vary from agency to agency,” Gilbert said. “Each one is governed by its own statute, and the statutes aren’t the same.”

In the case of the CFPB, for example, the constraint against removing an agency head without an open seat to go to has kept director Cordray in place, at least for now, according to Jordan, of the University of Akron. That’s despite an ongoing legal challenge to the CFPB’s structure.

The CFPB, a favorite target of conservatives, is a single-member agency; there are no other seats besides the director’s.

But, at the CPSC, in contrast, “There’s no question that the president can remove someone from the chairmanship without cause,” Jordan said.

In Kaye’s case, he wasn’t forced out of the commission altogether. He just stayed on in his commissioner’s seat.

Other Leader Slots

In addition to independent agencies where Trump has replaced Democratic chairs or acting chairs with Republicans, some of the other top slots stand as follows:

  •  Janet Yellen (D), whose term on the Federal Reserve Board ends in 2018, remains chair of that agency, as do a few other Democratic chairs or directors of other independent regulatory agencies, including Cordray.
  •  The Merit Systems Protection Board is down to one member, a Republican who was designated vice chairman on Jan. 23;
  •  At least one agency, the Postal Regulatory Commission, was already headed by a Republican before the inauguration.

To contact the reporter on this story: Martina Barash in Washington at MBarash@bna.com

To contact the editor responsible for this story: Steven Patrick at spatrick@bna.com

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