White House tells regulatory agencies to be lenient
Office of Information and Regulatory Affairs (OIRA) administrator offers up best practices for agencies, says "enforcement should be free of improper government coercion."
In a not widely publicized directive, the White House is telling regulatory agencies to be lenient with investigations and enforcement actions.
“Agencies should consider applying the rule of lenity in administrative investigations, enforcement actions, and adjudication,” Office of Information and Regulatory Affairs (OIRA) Administrator Paul Ray wrote in an August 31 memorandum.
He added agency regulations should apply limiting principles to the duration of investigations; regulations should require investigating staff to either recommend or bring an enforcement action, or instead cease the investigation within a defined period.
To prevent enforcement actions from being done out of retaliatory or punitive motives, Ray said agencies should not institute additional investigations against the subject of an enforcement without approval by a high level presidential appointee unless the new investigations come from facts uncovered in the original probe.
Most federal offices are required to submit new regulations for review, clearance and approval to OIRA, a division of the Office of Management and Budget and OIRA has the power to review “significant regulatory actions.
As a statutorily independent agency, the Securities and Exchange Commission is exempt. However, SEC Chairman Jay Clayton, a golfing companion of President Donald Trump, has made it a practice to submit its rules to OIRA for evaluation.
In his letter, the OIRA head told the agencies they should establish procedures to encourage voluntary self-reporting of regulatory violations by regulated parties in exchange for reductions or waivers of civil penalties, including grace periods to cure minor violations without fear of penalty if their offices have not already done so.
He emphasized their offices should bear the burden of proving an alleged violation of law while the subjects of enforcement should not have the burden of proving compliance. Ray told the agencies they should seek approval from a high-level presidential appointee before making an arrangement (called a “tolling agreement”) to extend the statute of limitations.
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