Corporate Governance

The WSJ and a Lesson in Administrative Law

By J. Robert Brown

Alead editorial from the WSJ last week complained about the perceived efforts by the Democrats in the Senate to not approve a large number of appointees submitted by the Bush Administration. 

The article asserted that the Democrats in the Senate were sitting on 180 vacancies in the Executive Branch and another 28 judges.  The editorial singled out three vacancies on the Federal Reserve Board that "have been held hostage since May to the whims of Banking Chairman Chris Dodd." 

Of course the Bush Administration's failure to nominate the candidates recommended by the Democrats for the SEC and the FCC had nothing to do with politics.  Indeed, it was the Democratic leadership that was "demanding that their nominees be seated immediately, before their background checks have cleared."  Finally, the editorial asserted that the Democrats were "negotiating in bad faith with the White House, often telling nominees that they won't be granted a vote unless they formally pledge to step down after President Bush leaves office."  This was "especially pointless" claimed the editorial "since they'd serve at the pleasure of the next President anyway."

We offer no comment on the characterization of the negotiating process but address the last point.  In mentioning that the relevant positions "serve at the pleasure of the President," the WSJ has gotten it's administrative law wrong.  That may well be true of many of the positions but not all of them.  For example, the editorial specifically mentions the unfilled positions on the Federal Reserve Board.  These positions do not serve at the pleasure of the President but receive14 year terms.  See Fed Web Page ("The full term of a Governor is fourteen years; appointments are staggered so that one term expires on January 31 of each even-numbered year.").  The positions on the SEC and FCC likewise do not serve at the pleasure of the President but serve for five year terms.  This is no doubt one of the reasons why the White House is thinking long and hard about making the nominations.

No doubt politics plays a large role in these appointments, particularly as one administration winds down and another is on the horizon.  But in discussing the matter, it is helpful to have accurate facts. 

Full post as published by The Race to the Bottom on February 11, 2008 (boomark / email).