New Voices for Consumers

...It was O'Connor's nomination that set off a round-the-clock talkathon protest by Wisconsin's Democratic Senator William Proxmire...

...The proper answer, especially at a confirmation hearing, is an unequivocal and loud "yes...

...The well-paid and ubiquitous industry lobbyists who keep so many clubs and restaurants in business in Washington know that they are wasting their time trying to get a Swidler, a Morgan, a Dixon, a Halaby, or a Minow to bite on their baited hooks...

...their jobs...

...The process began, then, with a recognition of the need for regulating abuses of monopolies...

...The latter still operates like a gasping steam locomotive trying to pull a 100-car freight train up a steep grade...

...Tough as they are on Capitol Hill, the broadcasters scare easily, and the effects of Minow's harsh words were promptly seen on television screens, at least for a time, in the form of a sharp increase in worthwhile public service programs...

...Dixon also has reactivated the agency's economic studies division...

...But how important is expertise...

...However, the ex parte contacts which bedeviled the agencies as well as Sherman Adams during the declining years of the Eisenhower Administration, have not yet become a problem under President Kennedy...

...New Voices for Consumers by JULIUS DUSCHA FOR THE first time in more than a decade the consumer has some influential friends in those Federal agencies in Washington that most affect his pocketbook: the long-neglected regulatory commissions...

...President Kennedy already has Secretary of Commerce Luther H. Hodges drawing up proposals for a national transportation policy, one of the key proposals made by Landis, who also urged the President to coordinate energy and communications policies...

...Before taking over as head of the FAA, which has primary responsibility for the safety and control of the airways, Halaby tested the then controversial Lockheed Electra and personally pronounced it airworthy...

...The FPC's Swidler is a protege of David E. Lilienthal, the former chairman of both the Tennessee Valley Authority and the Atomic Energy Commission...

...The agencies have staff members who can advise the commissioners on technical problems...

...And Congress finally approved some of the changes in FCC procedures that the industry initially defeated...

...Or consider what Dixon has done to shake up' the FTC...

...The agencies started off in a burst of enthusiasm...

...The FPC is the outstanding example...

...Earlier this year when the appointees to the regulatory bodies came before the Senate Commerce Committee for their confirmation hearings, one of the first questions asked of them was whether they viewed the agency to which they were appointed as "a creature of Congress...

...A contributing factor to the FCC defeat was the op position to the plan by Robert T. Bartley, a member of the Commission who happens to be Speaker Rayburn's nephew...

...Minow may be the best-known of the Kennedy appointees to the regulatory commissions, but the names of men like Chairman Najeebe E. Halaby of the Federal Aviation Agency, Chairman Joseph C. Swidler and Howard Morgan of the Federal Power Commission, and Chairman Paul Rand Dixon of the Federal Trade Commission unquestionably will become as well known and as highly controversial as they seek to put into effect the consumer-oriented policies they are pledged to carry out...

...The ICC also has finally recommended Federal subsidies to maintain essential railroad passenger services...

...Minow, who had been a member of Adlai E. Stevenson's law office, admittedly could not distinguish a cathode ray tube from a transistor...

...In fact, there are those who maintain that in their present form the regulatory bodies can never accomplish the jobs they were set up to do...

...While the President's appointments to the agencies have been generally good, his efforts to reorganize the regulatory bodies met with opposition that the Administration might have anticipated and headed off...

...It took the agency more than six years to implement the Supreme Court decision in the controversial Phillips case, which said that the Commission had the authority to regulate natural gas producers as well as pipelines, simply because a majority of the members of the agency did not want to bring the producers under a Federal umbrella...

...The eleven-man ICC did, however, read the election returns...

...And it was not many years until the agencies were captives of the industries, largely because the industries were well-organized while the consumer was not...

...But soon the commissions entered a third phase: they became bogged down in judicial processes that seemed to give every advantage to the industries that were supposed to be regulated...

...Halaby is a lean, leathery jet pilot who could instill confidence in the most nervous Nellie on her first jet trip...

...The second phase was the establishment of the agencies amid bright hopes for their future work on behalf of consumers...

...Hardly...

...A deceptively soft-spoken Tennesseean, Paul Rand Dixon, is manfully trying to turn the dowager into a fast-stepping consumer's consort...

...But the ICC chairmanship still rotates among the agency's commissioners each year, thus effectively cutting the President off from any real direction of this, the first of the regulatory agencies, set up in 1887...

...He feels that broad investigations of trends in the economy frequently can be more effective than picking away at a problem case by case...

...The FPC's past disregard of consumers was so blatant that even the courts had to reprimand the Commission more than once for similar failures...

...They had their pick of law school graduates...

...The ICC grew out of the buccaneering days of the first large railroad systems following the Civil War...

...And the regulated industries already are howling as if they had been stabbed with a pitchfork...

...All of the plans strengthened the role and authority of the commission chairmen and permitted the delegation of routine decision-making authority to hearing examiners and employe boards as well as to panels of commission members...

...Since then he has taken his first parachute jump so that he could better evaluate proposed Federal regulations governing the new sport of parachuting...

...Indeed, it is quite possible that the history of government regulatory bodies is entering a fourth phase in the United States...

...it has instituted a broad series of procedural reforms that should speed up its work and put at least some of its cases on a respectable railroad timetable...

...The O'Connor appointment is yet another indication of the always present power of the oil and gas industry as well as the influence of the oilconscious Texas diumverate of Vice President Lyndon B. Johnson and House Speaker Sam Rayburn...

...If the Administration's implementation of the reorganization and coordination proposals made by Landis had been as extensive as its staffing of the agencies has been competent, the consumer would now find himself in an even better position...

...This is a lesson, however, that industry seems to have as difficult a time learning as consumers have had in banding together to protect their overriding interest in regulation...

...As FAA Chairman, Halaby is determined to install as quickly as possible the devices and controls that are so desperately needed to make the nation's air system safe for high-speed jet traffic...

...At the FCC the admittedly difficult problem of re^ allocating television channels to make full use of UHF facilities (numbered thirteen and above) was passed over by commissioners who, as Landis bluntly commented, seemed to be "incapable of policy planning...

...But now there are heartening indications that the agencies are awakening from their long sleep and are once again attracting able young lawyers who are seeking out exciting public service rather than a fast start up the ladder to corporate security...

...But President John F. Kennedy has given the regulatory bodies a much-needed transfusion of new blood...

...An SEC reorganization was also lost on Capitol HilL largely because of the same sort of industry influences that shot the FCC proposals out from under a rather startled Administration...

...The FCC, FPC and AEC, on the other hand, were established because of the inherently monopolistic characteristics of the broadcasting industry, private utilities, and nuclear energy...

...All of these are matters that transcend procedures and organization charts...

...poor men will wreak havoc with good laws...

...Of course the agencies cannot be made over in a day, or even a year...

...Now, as Landis has noted, the ICC never talks to either the CAB or the FAA, the Atomic Energy Commission seldom speaks to the Interior Department's Bureau of Mines, and the Defense Department clutches close to its bureaucratic breast hundreds of radio frequencies and television channels that it says might be needed in time of national emergency but which meanwhile the communications industry could put to worthwhile civilian use...

...There is some concern in Washington about the lack of expertise on the part of some of the appointees to the regulatory bodies...

...For twenty-five years Swidler, a dark-haired, serious man with the meticulous look of a nononsense lawyer, was an attorney for TVA...

...Thus the commissioners will have more time to deal with the important issues that come before them...

...The FCC, for example, has had to treat an application for a radio transmitter aboard a shrimp boat the same as an application for a television channel worth hundreds of millions of dollars...

...What the regulatory agencies need are commissioners who are dedicated to the determination of issues in the public interest...

...Swidler believes that the FPC, which had been the worst of the industryoriented agencies, ought not merely to wait for cases to come before it but should act as a consumer's counsel heading off potentially dangerous situations before they explode in the public's face...

...Under this plan truly judicial bodies would decide cases while other agencies, probably as part of Cabinet departments, would carry out the routine regulatory, promotional, and other non-judicial activities now included in the work of the commissions...

...Nevertheless the beginning has been encouraging and the future looks bright.Although much of the blame for the sluggishness of the regulatory bodies has been placed upon their procedures, even more important has been the attitude of the members of the agencies toward...

...Men in mid-career fought for places on the commissions...

...The President and his talent scouts, led by his brother-in-law Sargent Shriver, who is now director of the Peace Corps, conscientiously sought out men for the agencies who were at once politically acceptable and extremely able...

...So far only one lame duck has found a roost in the agencies, which were a favorite nest for defeated officeholders during the Eisenhower years...

...And when the public interest—the consumers' interest— is given first consideration the industry itself is protected from the severe and painful backlash of public criticism that is certain to follow any flagrant disregard of the consumer...

...But as James M. Landis, President Kennedy's former adviser on the regulatory agencies, stated in his stinging report on the commissions last December: "The prime key to the improvement of the administrative process is the selection of qualified personnel...

...But a four-to-one or three-to-two consumer ratio on the FPC is far better than the often total oil and gas domination of past years...

...The ICC has known for years that a new approach must be taken to the problems of railroads trying to compete with trucks, buses, airplanes, and automobiles, but the Commission formulated no policies...

...What is perhaps even more important, few members of Congress, particularly the Senators and Representatives on the Commerce, Appropriations, and other committees that oversee the work of the agencies, are bashful when it comes to representing the interests of their constituents or friends before the commissions...

...As to the FPC, Landis had suggested that it be enlarged from a five to a seven-man body and be given authority to split up into electric power and gas and oil panels...

...Nor has the CAB concerned itself with the vast changes in the air industry being brought about by the huge and fast jets and by the multiplicity of carriers serving heavily-traveled routes like the New York-Washington run...

...Good men make poor laws workable...

...Congress did, however, ap prove reorganization plans for the FTC, Civil Aeronautics Board, National Labor Relations Board, and the Federal Maritime Board...

...Perhaps the monument to FTC inefficiency was the Carter's Little Liver Pills case, which went on for sixteen years before Carter finally was ordered to remove the word "Liver" from its trade name on the rather solid grounds that the pills had no effect on the liver...

...The Kennedy lame duck appointment was that of former Senator Allen J. Frear of Delaware to the Securities and Exchange Commission...

...The FTC and the Food and Drug Administrations were set up in 1914 on the eve of World War I following disclosures of the businessman's disregard for the consumer's health, sensibilities, or value received for his dollar...

...Or does he have to be an oil promoter to understand the FPC...

...But the President failed to ask Congress to reorganize either the Federal Power Commission or the Interstate Commerce Commission...

...Presumably the President will follow through on these and other Landis recommendations next year...

...Unhappily, President Kennedy's third appointment to the five-man FPC was Lawrence J. O'Connor, whose entire experience had been making profits in the oil and gas industry...

...During the last years of the Truman Administration and throughout the eight years of the Eisenhower Administration the commissions were largely the captives of the industries they were established to regulate...

...The press watched their every move...

...The fusty, musty FTC had come partially to life in the last two Eisenhower years under the chairirianship of Earl Kintner, but unfortunately for the consumer Kintner talked tougher than he acted...

...Neither Swidler nor Morgan had any first-hand knowledge of the oil and gas industry— so they took an extensive tour of oil fields and cracking plants in Louisiana and Texas...

...Dixon is not the kind of man to' stomach sixteen years of legal maneuvering for such a decision...

...The tightly organized and highly influential radio and television industry promptly got even with the young Mr- Minow by spearheading a lobbying drive on Capitol Hill which defeated a proposal to reorganize the FCC by Executive action...

...Does a man need to know how to build a transmitter to be an effective FCC commissioner...

...It is early yet in his Administration, of course, but this currently encouraging situation is largely a reflection of the generally high quality appointments to the commissions...

...The regulated industries themselves must be healthy and viable, but the laws give the industries all the protection they could conceivably need...

...Americans like to say that ours is a government of laws rather than of men...

...The most widely-publicized of the new appointees is Newton N. Minow, the cherubic-looking chairman of the Federal Communications Commission who brought the wrath of the broadcasting industry upon himself by saying out loud and in public what everyone knew—that television had become "a vast wasteland...

...During the atrophy of the Eisenhower years the agencies became deeply mired in this third phase of their history...

...In his last years of TVA service Swidler rose to become general counsel of an agency whose dedication to the people has become legendary throughout the world...

...Soon the industries were the only ones paying any attention to the agencies, which became resting places for political hacks, sinecures for broken down bureaucrats, safe berths for listless lawyers, and stepping stones to well-paid industry jobs for .the ambitious...

...This was even true of the AEC, which as the newest of the major regulatory agencies is only fifteen years old and is working on an exciting frontier of knowledge...

...Dixon, former chief counsel and staff director for Senator Estes Kefauver's Antitrust Subcommittee, has reorganized the FTC and is determined to get the agency to act before the consumer's pocketbook has been picked...

...they are problems that can be solved only by first-rate men determined to find the answers without regard for the sensitivities of the industries and their lobbyists...

...Other appointees, like Halaby and Dixon, have had extensive background and knowledge in the areas that they are now regulating...

...In the past a typical FTC cease-and-desist order was entered only after false advertising or other schemes had bilked the public...

...JULIUS DUSCHA is a staff writer of the Washington Post...

...Soon after he took office Swidler—and Morgan, a former Oregon public utilities commissioner also known for his defense of consumer interests—sent a natural gas case back for further hearings because the company failed to give adequate consideration to the effects of the decision on consumers...

...A few blocks away from the FPC's modern suite of offices in Washington primly stands the Old Lady of Pennsylvania Avenue—the Federal Trade Commission...

...Eisenhowerappointedchairmen • could have accomplished the same thing—if they had been as concerned about the consumer as is Dixon...

...The FPC's pro-industry bias became so pronounced in the last years of the Eisenhower Administration that regulatory bodies from consumer states were in constant conflict with the Federal Commission...

...Such critics of the regulatory process as Louis J. Hector, the Miami lawyer who resigned from the CAB in a huff in 1959 and then issued a caustic blast at all of the agencies, believe that the judicial work of the agencies should be separated from their purely regulatory activities...

...Students of the regulatory process have noted that agencies have been born out of abuses or developed from an obvious need for control of a naturally monopolistic situation...

...Perhaps such a separation of powers would be the ideal answer, but Congress is so jealous of its role as an overseer of the regulatory agencies that it is unlikely to make this fundamental change...

...While the FCC reorganization plan lost largely because of the opposition of the broadcasting .industry, another important reason for the defeat was the poor liaison work with Congress by Landis and the White House Congressional staff headed by Lawrence O'Brien...