Enforcing the laws of the land

After more than two decades of ongoing controversy over how to protect health, safety, consumers, workers and the environment from corporate wrongdoing, the notions that defending regulation is politically toxic and that regulatory policy debates are the poster child for the nation’s bitter partisan divide are practically axioms in Washington.

It turns out, however, that both of these lessons are wrong.

In a new survey conducted by Lake Research Partners, seven in 10 voters — with solid majorities across political party, gender and geography — said increasing enforcement of our national laws and regulations is a good thing. If voters are frustrated about regulations, it is because they want them to be better enforced. And they want fairer, more equal and tougher action by our government agencies.

This holds true regardless of political party — there is no statistically meaningful difference between Republicans, Democrats and independents on these issues.

{mosads}How can these data be squared with the conventional wisdom on regulation? It turns out that there is a substantial disconnect between the Big Business-backed rhetoric against regulation — well ensconced in Washington — and popular sentiment.

It also matters what voters are asked about. Voters across the country evince much stronger support for regulation than might be expected, but the numbers in favor of tougher enforcement of rules jump through the roof. The unequal enforcement of the rules of the game — tough on the little guy, gentle for the powerful — offends our basic norms of fair play.

Case in point: An investigator for the Federal Reserve Bank of New York secretly recorded audiotapes that reveal the culture of deference to big banks, providing a rare glimpse into the relationship regulators have with the banks they oversee. In them, a Federal Reserve official describes a financial transaction involving Goldman Sachs as “legal but shady,” yet the regulator takes a deferential approach with the bank throughout the discussion.

People get that these issues are not abstractions: The failure to control the big banks was largely responsible for the 2008 financial crash and ensuing Great Recession, which threw tens of millions out of work, and millions out of their homes.

Or, consider the failure of auto safety regulators to prevent wrongdoing. Just the other week, Sen. Claire McCaskill (D-Mo.), reflecting on the ignition switch defect in General Motors cars linked to at least 23 deaths and hundreds of injuries, accused the National Highway Traffic Safety Administration of being “more interested in singing Kumbaya with the manufacturers than being a cop on the beat.”

Or, ask the people in West Virginia about regulatory enforcement. On Jan. 9, near Charleston, W.Va., an estimated 10,000 gallons of a toxic chemical waste, MCHM, leaked from a private storage facility owned by Freedom Industries into the Elk River, just 1.5 miles from a water treatment plant. The leak contaminated the drinking water supply of over 300,000 residents in nine counties, putting pregnant women, seniors and children at risk. The last inspection at the Charleston site occurred over a decade ago, in 2001, and Freedom Industries ignored warnings of contamination. Moreover, the government had been collecting minimal information about the health effects of MCHM, which is used at coal-processing plants to separate fine particles of coal from the surrounding rock in a process called “froth flotation.” As a result, health officials sent confusing messages, often endangering residents.

Cozy relationships between regulators and the regulated, minimal inspections, and penalties that hardly serve as deterrents — these are the hallmarks of our enforcement system today. Voters across the country are frustrated with this approach. And small businesses suffer from an unequal playing field with their larger competitors.

By contrast, when enforcement is done right, there are enormous benefits. Recently, the Consumer Financial Protection Bureau cracked down on some of the big banks: Bank of America was hit with $727 million in fines because of deceptive practices, including charging customers for products they never agreed to; JPMorgan Chase with $309 million for illegal credit card practices; and American Express with $59.5 million in refunds and $9.6 million in penalties for deceptive and unauthorized billing. Overall, in less than three years since the agency opened its doors, it has saved consumers more than $3.5 billion in excessive fees and interest.

We need to strengthen enforcement of these laws, not weaken it. That means no more revolving-door relationships, and no more culture of deference. It means adequate enforcement budgets for regulatory agencies. And it means tougher penalties for corporate wrongdoers, as proposed in the Hide No Harm Act introduced by Sen. Richard Blumenthal (D-Conn.), which would make it a crime for corporations to conceal evidence of hazards.

This approach has broad, transpartisan support, and it should win support from all members of Congress. When agencies fairly enforce the laws, we all win with clean water, safe food and drugs, and a financial industry held accountable.

Encapsulating the national consensus that emerges from the Lake Partners Research polling, Sen. Elizabeth Warren (D-Mass.) recently told NPR that “There’s a fundamental question about who this country works for. It can’t just work for those who already have lots of money and lots of power. We’ve got to have a country that works for everybody else.”

We couldn’t agree more.

Weissman is president of Public Citizen and co-chair of the Coalition for Sensible Safeguards. Bass is executive director of the Bauman Foundation and affiliated professor at Georgetown University’s McCourt School of Public Policy.