Five Questions with Senator Sheldon Whitehouse

On Wednesday this week, the Supreme Court heard oral argument in Securities and Exchange Commission v. Jarkesy, one of several cases before the Court this term that may have tremendous impact on how and whether executive branch agencies are permitted to do their jobs. We’ve talked previously about two other cases where conservatives took aim at executive branch agencies:

• CFPB v. CFSA, which goes to whether the Consumer Finance Protection Bureau can continue its work to protect consumers

• Loper Bright Enterprises v. Raimondo, an effort to end a legal doctrine called “Chevron deference” that directs courts to defer to federal agency expertise, in other words, to let federal bureaucrats go about their work. Without Chevron deference, agencies’ ability to act to protect us in areas like the environment, health care, and national security could be severely impaired.

Our guest tonight for “Five Questions” is someone who is uniquely qualified to help us understand what’s at stake here. Sheldon Whitehouse represents Rhode Island in the United States Senate, where he serves as a senior member of the Judiciary Committee and the Chair of the Judiciary Subcommittee on Federal Courts, Oversight, Agency Action, and Federal Rights.  A former U.S. Attorney and Attorney General in Rhode Island, and a fierce defender of democracy, Whitehouse is a champion for ridding American politics of corrupting influences. He’s a force to be reckoned with. I stop what I’m doing whenever I see him about to ask questions of a witness in a Senate hearing, for the pure pleasure of knowing there is still intelligence and focus in our politics.

One of the Senator’s key concerns is combating special interest control of our politics and the courts. He is working to enact legislation to root out special interests and is pushing to enact stronger ethics and transparency standards in the Supreme Court, along with his work to shine a light on the dark-money influence over the judicial selection and confirmation process. It’s a real honor to have him with us today!

“Five Questions” is a feature for paid subscribers to Civil Discourse. The rest of my posts are available to everyone, but Five Questions is my way of thanking people who support this work financially so I can devote more time and resources to it. I value having all of you here—free subscriptions will always be available.

Joyce: The first case the Supreme Court heard this term was a challenge to the Consumer Finance Protection Bureau. You’ve been very focused on this case and surrounding issues. Help us understand what’s important about this one.

Senator Whitehouse: After millions of Americans lost their homes to the massive foreclosure crisis in 2008, the Wall Street forces responsible faced little accountability because no government agency was singularly responsible for enforcing or implementing the consumer protection laws on the books.  The CFPB – the brainchild of my dear colleague Senator Elizabeth Warren – has been a real success ever since Congress created it, serving as a bulwark against greedy behavior from banks, payday lenders, and student loan servicers.  The Bureau has won back over $17 billion for consumers since 2011. 

Powerful corporate forces would love to put the Bureau out of business.  But they don't necessarily want to be seen attacking the CFPB directly because it’s done so much good work for their customers.  So, after failing to get any political traction against the CFPB among the American people, they turned to the right-wing, pro-corporation justices at the Supreme Court.

Groups like the Federalist Society have been cooking up fringe legal theories to inject into mainstream legal thought for years.  Big special interests deploy an army of attorneys, pliable academics, and amenable judges to weaponize those theories to their advantage.  And once a challenge like this makes it to the Supreme Court, a flotilla of coordinated amicus briefs – funded by secretive corporate and billionaire interests – tell the justices (those same justices the big interests helped put on the Court) how they ought to rule.  I’ve spent years blowing the whistle on this scheme.  It was the focus of my amicus brief in the Court’s last CFPB case.

Joyce: What are your concerns about what the Court might do when it rules on this case; what are the implications?

Senator Whitehouse: Well, the CFPB survived an initial legal challenge in the wake of the Court’s decision in Seila Law v. CFPB.  That case eroded Congress’s ability to insulate independent agencies from political influence; the Court struck down the CFPB’s independent single director but mercifully left the Bureau otherwise intact.  But that half-measure wasn’t enough for the billionaire and corporate interests.  So, in CFPB v. Community Financial Services Association of America, corporate interests have returned, seeking a fatal blow. 

The fringe legal theory here argues that the CFPB’s funding mechanism violates the Constitution’s Appropriations Clause.  For obvious reasons, no court had ever found that Congress could violate the Appropriations Clause by passing a law to fund an agency.  No court, that is, until three Fifth Circuit Court of Appeals judges appointed by former President Trump heeded the call of their right-wing sponsors and deemed the CFPB’s funding structure unconstitutional. 

The Fifth Circuit’s bizarre ruling threatens every government agency and program funded outside the annual appropriations process, including Medicare, Medicaid, Social Security, the Federal Reserve, the Securities and Exchange Commission, the Food and Drug Administration, and the Federal Deposit Insurance Corporation, to name a few.  The case is a threat to the strength of our financial system and other programs that seniors and families rely on, which is why I’ve joined Senator Warren to make the stakes of this case clear.

Joyce: This term, conservatives have had success in getting cases in front of the Court that attack what they call “the nanny state” and what I think of as tens of thousands of experienced career employees and political appointees across the executive branch, making life better for Americans through their work. What do you read into efforts to disassemble the work of regulatory agencies? Is this related to the attack on the CFPB?

Senator Whitehouse: Killing off the CFPB alone would be a blow to all the people this agency protects.  But the phony front groups and dark money forces attacking the CFPB have even greater aspirations.  They want to build a legal architecture that hobbles Congress’s ability to establish independent agencies that safeguard Americans’ health, safety, and economic welfare. 

These regulatory agencies provide massive value to the American people.  Just one example: as Americans widely adopted automobiles, regulators required seat belts and air bags.  Straightforward stuff.  Boilers usually don’t blow up anymore; insurance policies usually pay; medicines usually work; stock reports are usually honest; and bank failures usually don’t bankrupt depositors.  Thank regulation.

Industries that resent government regulation, like Big Oil, have jammed the gears of Congress with mountains of dark money for Republicans.  They have stacked the courts with right-wing judges and justices through dark-money influence over the process by which those judges and justices got their seats on the bench.  In some cases, independent administrative agencies are the best bulwark protecting the interests of regular Americans.  That’s why these corporate forces are attacking the basic functions of the federal government with such vigor.

Joyce: Later this term, the Supreme Court will hear Loper Bright Enterprises v. Raimondo, which has recently been consolidated with Relentless v. Department of Commerce, cases that consider whether fishermen can be forced to pay for federal monitors who oversee their compliance with regulatory rules. The larger issue involves Chevron deference,—whether courts should defer to agency interpretation of ambiguous regulations. Are you concerned that the Court will replace Chevron deference, which permits experts in agencies to make day to day decisions about regulatory matters with something far less deferential?

Senator Whitehouse: The Supreme Court’s Chevron framework ensures that unelected judges defer on certain complex technical questions to the career experts.  These agency experts report to politically accountable agency heads and the president, and are subject to congressional and judicial oversight, to be sure that they properly implement and refine Congress’s stated policy objectives.  For nearly four decades, Chevron has been bedrock administrative law and a key piece of the modern regulatory structure that Congress set up.  But right-wing corporate forces resent Chevron, so they’ve cooked up and laundered fringe legal theories to try to strike it down.

The Court’s Republican supermajority already smuggled the so-called “major questions doctrine” into the Court’s jurisprudence in West Virginia v. EPA.  The “doctrine,” invented and pushed by the same right-wing interests that built the Court’s majority, saps regulatory agencies of their power to hold corporations accountable for the harms they inflict.  And now those same interests directly threaten Chevron, as I laid out in the amicus brief I filed in Loper.

Eliminating Chevron deference would degrade accountability, and the separation of powers, by shifting the power to make expert policy decisions from an elected Congress and the tightly monitored executive agencies to the judiciary where neither technical expertise nor political accountability are to be found.  And it’s all part of a well-coordinated, industry-driven campaign to dismantle administrative agencies.

Joyce: All of this will transpire in front of a Supreme Court whose integrity has been damaged by an ethics scandal. You’ve proposed legislation that creates ethics reform. The Supreme Court has now adopted an ethics plan of its own, which I heard you refer to as the Court’s agreement it would play baseball by the rules, but without any umpires. Can you explain what you meant by that, and whether the reforms the Court has adopted are sufficient?

Senator Whitehouse: The Supreme Court’s adoption of a Code of Conduct was a long-overdue step, and its adoption was the first chink in the Court’s armor of indifference about certain justices’ clear ethical misconduct.  But the real test here will be how the justices enforce this new Code.  Currently, there is no enforcement mechanism and the honor system has failed with this crew. 

Everywhere else in government, there is a clear process for investigating and enforcing ethics rules.  The Senate has an Ethics Committee.  Executive agencies have ethics offices and Inspectors General.  The other federal courts have their own well-established ethics process.  Only the Supreme Court has none of this: no inbox to submit complaints; no investigative mechanism to review complaints; no impartial panel to decide complaints; and certainly no transparency.

My ethics bill would create a clear process for processing complaints and allow a panel of chief judges from the lower courts to investigate and make recommendations based on those complaints.  Now that the highest Court has its Code, it needs procedures like what I propose in my bill to fairly enforce the rules.  My bill passed the Judiciary Committee, and I’m pushing for a full Senate vote on it to give the Court’s new ethics code some teeth.

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These issues are difficult. The legal doctrines aren’t always readily understandable, even to lawyers. I’ve had to pore over the briefs and listen to the arguments to make sure I understand the nuances. So I’m particularly appreciative of Senator Whitehouse’s ability to go straight to the guts of what these cases mean for us, in a real world way.

The Supreme Court, really the courts themselves, are on the ballot in 2024. The next president will appoint new justices and federal judges across the country. Senators have the ability to confirm or withhold confirmation from the president’s nominees. At stake? An independent judiciary that follows the law instead of implementing a political agenda.

We’re in this together,

Joyce