Democratic leaders in Congress want to give President Obama the ability to appoint inspectors general at five financial regulatory agencies. Such a move would undermine independent oversight of large parts of the federal bureaucracy.
Federal inspectors general were created to investigate agency management free from political interference. Some are presidential appointees; others are appointed by agency heads. Legislation approved by the House and pending in the Senate would convert the Federal Reserve, Commodity Futures Trading Commission, National Credit Union Administration, Securities and Exchange Commission and Pension Benefit Guaranty Corp. IG positions into presidential appointments. The measure also would give the Senate the ability to approve any appointee. These changes would only serve to further politicize these positions.
Mr. Obama's June firing of Corporation for National and Community Service Inspector General Gerald Walpin alone calls the plan into question. In a July 7 letter to Sen. Joe Lieberman, Connecticut independent and chairman of the Senate Homeland Security and Government Affairs committee, IGs from the five agencies warned the proposal would "seriously disrupt the continuity of operations and risk undermining our effectiveness."
Proponents claim the change would bolster independence and accountability. But in this case, the move actually threatens to undermine investigative authority. Some of the IGs already report to bipartisan boards that oversee their agencies, which ensures a higher degree of accountability.
Supporters also argue that the IGs will not be investigating the president personally so it shouldn't matter if he appoints them to jobs at independent agencies. This point also misses the point. As appointees, IGs serve at the will of the president and investigate operations directed by other presidential appointees. In these positions, they monitor implementation of congressional legislation at the agencies. Surely, at a time when the president and Congress are planning massive expansions in government power, some political leverage would be gained by further politicizing these jobs.
The bill does offer some positive changes, such as giving IGs subpoena power and broadening their staffing abilities. However, independence from direct congressional and White House control remains critical. Full investigations of any problems related to ongoing efforts to increase financial-sector regulation and the spending of hundreds of billions of dollars to prop up the industry must be assured. Keeping the positions away from the assuredly political confirmation process also can help ensure that this remains the case.
Sen. Charles E. Grassley of Iowa, the ranking Republican on the Government Affairs Committee, is backing the concerned IGs and has placed a hold on the legislation. We welcome that move. Now is not a wise time to remove independent review of the government leviathan.