Sunday, November 08, 2009

The Ominous 4th Branch of Government . . .

You've heard of the Legislative Branch (the people who make laws), the Executive Branch (the people who carry out and enforce laws) and the Judicial Branch (the people who interpret and apply laws). But have you heard of what is sometimes called the "4th Branch" of Government -- the one which controls many of your day-to-day activities? It is the "Administrative Branch," but you will not find it mentioned in the state or federal constitutions. It is that alphabet-soup of administrative agencies such as the EPA, FCC, IRS and FERC on the federal level, and DEC, PSC, DOT, Health Dept., Education Dept., and a plethora of authorities at the state level.

While officially they are part of their respective Executive Branches, many of the agencies making up this de-facto "4th Branch" of government have been given their own legislative and judicial powers. Like legislatures, they can make rules that have the force of law. Like courts, they can interpret certain laws, hold hearings, make determinations and impose penalties. Sometimes the same agency makes the rules, prosecutes violations of the rules, and holds hearings to determine compliance with and impose penalties for violations of the rules. Isn't the combination of legislative, executive, and judicial powers in the same people something that our founding fathers sought to avoid when they set up our state and national governments? Does not the combination lend itself to abuse?

In our complicated world, administrative agencies are a necessary evil. When you think of the expansion in the number of things that people can do now over what was possible one hundred years ago, you will realize that the number of ways that people can harm each other has also increased. If people are to live harmoniously with each other and nature, behavior needs to be regulated. Someone needs to make the rules to keep us from destroying each other. “We the People” have properly assigned that role to elected representatives in legislative bodies who enact the laws needed to maintain order. However, many areas require specialized knowledge to be properly regulated. Environmental protection, for example, is one of those areas, requiring knowledge in several areas of science. Most politicians do not have the specialized knowledge, and it is for that reason some of their legislative powers have been given to administrative agencies. The legislature passes laws describing how it wants behavior regulated, and then administrative agencies with expertise promulgate the detailed rules necessary to carry out the legislature's intent. At least, that is the theory of how things are supposed to work. Since most judges also do not have specialized knowledge, administrative agencies have been given quasi-judicial powers. The idea here is that experts with a greater understanding of a particular subject than the average person would be better able interpret and apply complex rules to achieve what the legislature intended. Again, that is the theory of how things are supposed to work. In general, the scheme has worked reasonably well. However, when considering the role of administrative agencies in our government and our daily lives, it is important to keep in mind how they differ from the legislative and judicial branches that they mimic.

Unlike legislatures, administrative agencies are NOT composed of elected representatives, so their rules might not necessarily represent the "will of the people." An important function of a legislature is to prioritize the relative importance of regulating one aspect of people's lives over another. A legislature can balance, for example, the need for a rule to protect the environment against the economic consequences of the rule, such as jobs lost, and determine whether the cost is worth the benefit. An agency that is created to protect the environment by its own nature will prioritize environmental protection over everything else. Balance with other priorities will occur only if the laws within which the agency must operate have been carefully crafted to reflect the legislature's priorities under all circumstances. That is an almost impossible task.

Unlike courts of law, where decisions must be supported by at least a preponderance of the evidence (the burden of proof in civil matters, or evidence beyond a reasonable doubt in criminal matters), determinations by administrative agencies need only be supported by "substantive evidence" and not be "arbitrary or capricious" to be sustained. Even if the administrative record contains a preponderance (the greater amount) of evidence supporting one particular way of addressing an issue, the agency is free to do something different as long as there is SOME evidence to support its determination. This is even the case when an agency is determining compliance or non-compliance with its rules and imposing penalties for the latter. This is because the acts of administrative agencies are viewed as "policy making" and matters of "expert" judgment, allegedly beyond the understanding of reviewing courts of law, with no "right" or "wrong" answers. But how would you feel if you got slapped with a financially ruinous penalty based on "some" evidence?

The ability to promulgate, apply, and enforce rules, with no direct accountability to the voters and minimal oversight by the courts under the guise of having an "expertise," makes the public vulnerable to those whose "agendas" may override their "expertise" -- those who may have insinuated themselves into an agency to benefit themselves or their friends.

In the waning days of the Bush administration, when it appeared that the financial system was going to collapse and attention was focused on the bailout debate, the Treasury Dept. quietly made a five-sentence change to tax guidance that reversed over 20 years of tax policy. This essentially produced a $140 billion windfall for certain banks. Tax lawyers debated -- afterward -- whether there was legal authority for the Treasury to implement the change, but it was clear that no one would have legal standing to challenge the change in court. The change was made without elected representatives' participation. The taxpayers were out the $140 billion. For the change to be reversed, only the Treasury or Congress could do it . . . but Congress had other things on its mind.

During his last years in office, Governor Pataki initiated an action with the governors of other Northeastern states to set up a regional "cap-and-trade" system (the "Regional Greenhouse Gas Initiative") to limit the output of carbon dioxide to combat global warming. The system was modeled after a Nitrous Oxide trading system, which was set up years ago under state and federal law to combat acid rain. The CO2 system was eventually put into place a year ago under regulations promulgated by the Department of Environmental Conservation -- but unlike the Nitrous Oxide system, there was no federal law existing at the time that the state system was intended to implement. Even if the premise is accepted that global warming is a threat and is caused by mankind's output of CO2, there was no evidence whatsoever that the effort of the ten participating states acting on their own, without the rest of the country, could have a detectable impact. The move was more a symbolic gesture or political statement by a governor who was contemplating a run for the Presidency than a tangible move to combat climate change. But the effect on the general public would be tangible: New York's already sky-high electric rates would have to go higher, with some analysts predicting significant increases. Additionally, Downstate coal-fired electric plants would be encouraged to shut down -- likely to be replaced by Upstate generating capacity and power lines. Had this matter come before the state legislature, there certainly would have been merits to debate, including the exacerbation of an already horrible Upstate economy. But there was no debate. The system was simply implemented by administrative rule-making, redefining "air pollution" to include CO2. Elected representatives had no say. . . and predictably would not inject themselves into the issue after-the-fact for fear of alienating some constituency.

Currently, farms that have operated for generations in the fertile Central Valley of California are being denied water for irrigation, allegedly so that more water could be sent into the Bay area to protect the habitat of a small fish, but possibly sent to support growth in other parts of the state. Cropland has been turned into dust, orchards are dying, unemployment in some areas is around 40%, and farmers who fed a nation must now depend on food handouts from the government to feed their families. Administrative agencies control the water flow. While the situation is too complex to analyze here, what is clear is that many individuals and their families are now unwillingly forced to sacrifice all they own on the alter of government regulation. While there may be ways to rationalize this to avoid government fault, the effect is no different than if the government simply had come in and taken their farms. Again, law makers are paralyzed from taking effective action.

Administrative agencies help maintain order in our society. However, they have become so ubiquitous, and their powers are so great due to their combination of legislative, executive and judicial functions, that it is now possible for them to be used to implement sweeping changes to public policy. Neither debate nor approval by our elected representatives is needed to implement change. Because of this, agencies' narrow perspectives can result in individuals being deprived of their property or livelihood without adequate due process protections. Our founding fathers set up three branches of government to prevent each branch from becoming too powerful. Although they did not anticipate creation of the "4th Branch," they certainly would have understood its potential for abuse.

[The above article originally appeared in the October Utica Phoenix. Be sure to pick up the December Utica Phoenix to read "Oneida County Sticks It to the Villages - And Utica" ... in a news rack near you.]


swimmy said...

Administrative law...

While any attorney versed in the overwhelming NYCRR can tell you that it's a pain to deal with, the author makes some pretty rash generalizations.

1. When an agency promulgates rules, there is a lengthy process to go through, including several phases called "public comment sessions," which range from public hearings to allowing for written submissions from the public. Oneida county had a sample of that process at the federal level with the Bureau of Internal Affairs, and at the state level with the Public Safety Commission (NYRI project). The reason agency rules are given the effect of law is because of the plethora of information the agency must process before finalizing its rules. But they are not beyond the courts' access. If a promulgated rule was not not properly promulgated, those effected by the rule have the right to seek redress in Court, or with their legislature.

The other over-generalization is that the legislature is powerless to stop the agency. An agency is a creature of law. That means the legislature can repeal the law that creates the agency. Just like when the legislature does not care for a particular court decision, the legislature can pass a law to clarify or overturn an agency rule.

Some agency rules may hurt a certain category of people, e.g. the CA farmers, but it may have well-intentioned benefits for a different group of people. In the end, the public always has the legislature to fall back on.

Except New York. New York government is so dysfunctional, that despite knowing certain agencies are acting beyond their intended nature, they would rather squabble over the legitimacy of the majority speaker is or take care of their friends. Unfortunately, the public doesn't care enough to change that...

Strikeslip said...

Swimmy -- You are absolutely correct: What I have stated are generalizations (but I disagree with your term "rash") intended to raise public consciousness to the dangers presented by administrative agencies. While what you have stated is the way things are supposed to work, the way the system has played out is as I have presented it.

To put administrative law in black and white terms (I got this from a friend): If you are given a box of ping-pong balls and one of them is painted black, an agency can say that ping pong balls are black and a court would have to uphold the ruling (because the 1 black ping pong ball is "substantive evidence" supporting the ruling).

While we have the right to fall back on the legislature, the reality is that once a bad administrative decision is made, it becomes very difficult to undo using the political process.

In the example above, the supporters of black ping pong balls will likely claim that any legislation to declare ping pong balls white as being discriminatory in nature. What legislators would want to get involved in that mess?

Anonymous said...

The realization that bureacrats actully run government goes way back. I recall books and articles of the topic in graduate school in the mid sixties. However, the anti democratic tendancies of this control has grown to alarming proportions with the expansion of governemnt. Another recent example is the so-called health reform legislation. 2,0000 pages drafted by staff. I would guess that most who voted for it have no idea of the scope of its content.

swimmy said...

Interesting point, strike. But the courts have overturned rules that go against the weight of the evidence. If all the research shows that the majority of ping pong balls are white, and the agency declares them black, a court would easily overturn that finding because the knowledge is so common that it would fall into the purview of a layperson.

Perhaps the ping pong balls example is a bad one to demonstrate your point. I would propose the BIA decision to put 13024 acres into federal trust. Regardless of your position with the Oneidas, you cannot deny that the whole process took at least 3 years and involved the public every step of the way. Whether their decision was good or bad, it is being challenged. But if the practical way of agencies occurs the way you described then the courts would have no choice but to dismiss the law suits because there is "some" evidence to support the BIA's decision. That has not happened.

I'm not saying the system is perfect, e.g. new york state transit authority, or the water authority. But there are many times when the agency making the rules gets it right, and there is a balance sought in the rules.

What legislature would back off of overturning a bad agency decision if it meant losing re-election? If enough people put enough pressure on the legislature, it usually follows through, except in NYS, as we already established ;)

NYS is a prime example of agency law run a muck. Agencies in NYS are the text book example of what you describe. And often times, it is the person with more money who wins, regardless what the law and the rules say.

As for my use of the word rash, I do not know why I chose that word. As there certainly was nothing rash in the commentary. Perhaps, what I meant was overly general conclusions. In any case, I don't think my points should be lost on one word choice.

Strikeslip said...

If courts have overturned rules merely because they went against the weight of the evidence, I would like to see where it was done. Usually there is some other reason such as arbitrariness or lack of substantive evidence altogether.

In my hypothetical, we were dealing with the "Ping Pong Ball Administration" which has an expertise in ping-pong matters beyond all possible knowledge of the layperson -- or so they claim.

swimmy said...

If I still have my fed. ad. law book, i'll pull the cases I'm referring to.