Regulatory capture is a phrase used to describe when a government agency charged with placing limits on businesses becomes influenced or directed by some of the very businesses it is tasked with restraining. As a result, the businesses that do the capturing can obtain increased profits through the government bureaucracy taking actions such as providing them with favorable treatment and imposing barriers to competitors.
One mechanism aiding regulatory capture is the “revolving door.” Regulators become aware that if they act in their jobs in ways that benefit certain businesses, they will later be rewarded in the regulated industry. When they leave their government jobs they can walk through the revolving door into the “for profit” world. And the door can keep revolving with workers going back and forth between government and business jobs, ascending to exercising more power and receiving more pay over time.
An even more flagrant instance of regulatory capture can occur when the capturing businesses pay regulators while the regulators are still in government employment and still empowered to regulate these businesses and competitors. This practice is illegal in many forms. But diligent people will seek means to work around such restrictions.
Sen. Rand Paul (R-KY) may help expose such concurrent payment to regulators via his Royalty Transparency Act (S 3664) that was approved unanimously by the Senate Homeland Security Committee on Wednesday. The legislation seeks to make public more information about royalties paid to executive branch officers and employees.
Christian Britschgi noted in an informative Reason article on Thursday that among the royalties the legislation could help uncover are those paid to US government drug regulators by the companies whose drugs they are regulating. Britschgi quotes Paul pointing out that the presence of these payments by drug companies indicates the importance of his bill:
“This is just basic 101 of conflict of interest. We’re letting the billions of dollars that change hands over at [National Institutes of Health (NIH)] and between NIH and Big Pharma to be completely unscrutinized,” says Sen. Rand Paul (R–Ky.), the author of the legislation. “This is probably the first reform bill that actually has a chance to correct some of the things that are rotten in the system.”
Further states Paul:
“With the approval of the COVID mandates and COVID vaccine mandates, the committees approving these, we had the question, well, are there people on these committees who get royalties from the companies that manufacture the vaccine?” Paul tells Reason. “When I asked [Anthony] Fauci about this a year ago, his angry response was that it was none of our business and that he didn’t have to tell us.”
One thing we learned during the coronavirus scare is that when top US government coronavirus fearmonger Anthony Fauci sought to clamp down on people finding out information — whether it be about how dangerous and ineffective the coronavirus “vaccine” shots were or about alternative origin theories for coronavirus, for example — he tended to have something to hide. That something was the truth.
