WASHINGTON HAS a special vocabulary for everything. When bureaucrats become too close with the industry they’re charged with overseeing, it’s called “regulatory capture.’’ The phenomenon can be very expensive for the public. Most famously, the Office of Thrift Supervision was accused of lax oversight contributing to the collapse of Washington Mutual and IndyMac, two of the biggest bank failures during the 2008 financial crisis. The OTS has been eliminated.
No one has yet come up with a phrase to describe regulators who hate the industry they oversee, but maybe it’s time. When the Nuclear Regulatory Commission recently approved a new plant license, the 4-1 vote looked like a cause for celebration. The lone dissent, however, came from Chairman Greg Jaczko, and it brought his running feud with the nuclear industry - and his fellow commissioners - to a new level.
On the surface, the granting of America’s first new plant license in 30 years is a victory for nuclear power. For Southern Company and its financial partners, approval came after a five-year review process. Even the president has endorsed the idea of building new plants. With the blessing of Congress, the Obama administration’s Department of Energy has offered $8.3 billion in loan guarantees to build the plant at an existing nuclear site in Georgia.
Jaczko objected, insisting that there were “things that need to be analyzed.’’ But his further contention that his fellow commissioners were “issuing this license as if Fukushima never happened’’ represents an insult to them and a misreading of the commission’s power. In fact, the NRC is currently reviewing data from the Fukushima disaster, has held over a dozen public meetings and briefings on the issue, and retains full power to impose new safety requirements on all US nuclear power plants. In other words, Jaczko is raising a straw man.
What is actually going on runs deeper, and is much more personal. As a former staffer to Nevada Senator Harry Reid, Jaczko has been a bitter opponent of Yucca Mountain, the waste storage site that has been under construction in Nevada for decades. He has also worked for Ed Markey, one of the most outspoken opponents of nuclear energy in Congress. Jaczko’s isolation makes him appear openly hostile the industry that provides nearly 20 percent of America’s electricity; and his management style has drawn rebuke from his fellow commissioners - all of them.
Regulatory commissions like the NRC typically have five members, with three representing the president’s party. Normally, they try to operate by building consensus under the chair’s leadership, but it’s not uncommon to have partisan 3-2 votes on more controversial matters. What’s extraordinary is 4-1 vote with the chairman losing.
In an equally unprecedented act, all four of the commissioners serving with Jaczko - two Democrats and two Republicans - wrote to the White House in October complaining of a “chilled work environment,’’ and declaring that the chairman had “intimidated and bullied senior career staff.’’ They accused him of showing “open disdain’’ for its procedures and precedents.
This comes on top of an NRC inspector general’s report finding that Jaczko “was not forthcoming with the other commissioners about his intent to stop work’’ at Yucca Mountain. At the House hearing where all the commissioners were present, they testified to his “outbursts of abusive rage’’ and pursuit of a “dishonorable media campaign’’ directed at William Magwood, one of the panel’s Democrats.
For his part, Jaczko has feebly blamed the chaos on “communication problems’’ and his being “passionate’’ about safety. And the White House, in effect, is standing behind him: In a reply to the four commissioners, President Obama’s then-chief of staff insisted that “management differences have not impaired the commission’s ability to fulfill its mission.’’ Translation: We’re not touching this.
No one is suggesting the commission should cut corners on safety. Any new rules the commission approves from the Fukushima review can and should be imposed on the entire industry. Moreover, the implication that the other four commissioners do not have an absolute priority for safety is both arrogant and insulting.
The president and Congress agree that nuclear power should be an important component of our future energy mix. That requires impartial and thoughtful enforcement of regulatory standards. Chairman Jaczko’s longstanding disdain for the nuclear industry makes impartiality impossible.
When anyone points out that hostile, arbitrary regulation is a drain on our economy, Democrats often roll their eyes, as if the problem didn’t exist. But here’s a chairman with his own agenda who’s lost the respect even of his fellow Democrats. Standing alongside the president’s rejection of the Keystone pipeline permit, the dysfunction paints a dark picture. Why would investors want to risk their capital - or their time - on major infrastructure like America’s power grid, ports, pipelines, or tunnels?
FOR THE RECORD: My last column implied that the Colosseum had already been built during the rule of Roman consul Lucius Cassius. It had not been.