When I was a kid growing up in a coal mining community and regularly visiting the Shawnee National Forest in southern Illinois, my heroes were the guys in green uniforms who rode around in green trucks maintaining recreation areas: the U. S. Forest Service. I thought their mission was to keep the places I loved green — and I was totally on board with that. I remained on board for decades. Only in recent years have I come to understand that my heroes and their bureaucracy are the victims and agents of regulatory capture.
I spent nearly half my life as an environmental activist; but only in the past few years, have I come to understand regulatory capture.
Nobel Prize laureate George Stiglitz wrote about this phenomenon before I was born. Regulatory capture is defined as the process by which regulatory agencies eventually come to be dominated by the very industries they were charged with regulating. This occurs in countries around the globe, but is nowhere more apparent than in the world which surrounds me here in Southern Illinois.
Decades ago, when I first heard about logging proposals on the Shawnee National Forest, I fully supported them. After all, the motto of the Forest Service is “Caring for the land and serving people.” I considered these government foresters the “professionals” who best knew how to manage the Shawnee. It was not until after I cruised some of their advertised timber sales that I realized the Forest Service was proposing to cut very low-value timber in places where it made no sense — steep hillsides in shallow soil on fragile watersheds above ecologically sensitive recreation areas. I listened to their rationales as they distorted facts and defied logic in order to justify their money-losing logging program.
How do you lose money selling truckloads of timber? By spending more money than the timber is worth “administering” the sale; and most egregiously by reimbursing the timber/paper companies for the cost of building their own logging roads. Just recently, after environmentalists exposed this practice, the Forest Service has juggled some digits to better hide this subterfuge — but it still exists.
Why on earth would the “professionals,” who are paid handsomely to manage our national forests, agree to such a scheme? Because funding for the Forest Service is tied to archaic laws such as the Knutson-Vandenberg Act, which incentivizes this environmental degradation and fiscal mismanagement. The bottom line is that the more money the Forest Service loses selling our timber, the more money they get in their budget. And the overriding principle of any bureaucracy is to perpetuate the budget.
You can bet that laws and budgetary gimmicks like this were not dreamed up by environmentalists nor average citizens. Timber industry lobbyists and the lawmakers they bankrolled crafted this legislation and maintain it to this day.
Most recently this kleptocracy has set its sites on the waterfall timber sale, packaged as a phony “stewardship” project. This corruption is not confined to federal agencies. It abounds on the state level as well.
There was a time in Illinois when we had an Illinois Department of Conservation and an Illinois Department of Mines and Minerals. The former included staff biologists charged with monitoring, managing, conserving, and protecting the natural resources of the state. The latter was staffed with geologists and political appointees responsible for issuing permits for extractive industries such as mining and drilling. The two departments sometimes clashed, as when IDOC biologists issued assessments which were not always conducive to keeping the DMM’s industry permits flowing smoothly. So politicians who were well-compensated by lobbyists arranged to merge these two state agencies with the Illinois Department of Energy and — voila! — problem solved, the newly formed Illinois Department of Natural Resources rarely saw an industry permit application which they did not see fit to approve. This once-proud agency is now a de facto arm of the industries which they are supposed to regulate.
Another state bureaucracy, the Illinois Environmental Protection Agency, has the ostensible mission of safeguarding environmental quality in Illinois. A few years ago, it came to light that one of their inspectors lost his job for falsifying reports regarding a local landfill. This public employee’s collusion with industry reportedly went on for years before it was discovered. It is not unusual that when such colluders are caught or retire, they then conveniently and lucratively get employed by the very industry which they were previously supposed to regulate. At least they recycle!
Just recently, public relations experts in the IEPA announced that it would be a fine idea to pump millions of gallons per day from the Pond Creek underground coal mine into the Big Muddy River. Anyone who thinks there was no collusion between agency and industry in this instance has a weak grasp on reality.
This regulatory capture is not confined to government agencies. It is facilitated by legislators in the pocket of industry. Our local State Representative a few years ago who sponsored fracking legislation in Illinois received tens of thousands of dollars in out-of-state contributions from the fracking and other extractive industries. He shouted until he was hoarse to get that Illinois Hydraulic Fracturing Regulatory Act passed.
Then it was up to the Illinois Department of Natural Resources to spell out the rules for enforcing the law. No one was surprised when the rules they proposed watered down the legislation to even further favor industry. The foxes are truly guarding the henhouse — for other foxes.
Regulatory capture has been elevated to an art form — but there is still hope for participatory democracy. The key is participation. Once a citizen exhausts the administrative procedures of a particular regulatory agency, then he or she can seek judicial review and force the agency to obey the law. This takes time, but can work.
It does, however, require participation. The world is run by the people who show up. See you at the next meeting …
This column first appeared in The Southern.