Federal Case

Regulatory czar John Graham leads the government¼s charge in the war against bureaucratic waste and inefficiency.

ne afternoon back in late January of 2001, a former Wake Forest debating champion named John D. Graham (‘78) received a telephone call that would change his life dramatically. As it later turned out, the call would also have a huge impact on the way the U.S. government goes about the business of regulating everything from the air pressure in truck tires to the chemical preservatives contained in a frozen pepperoni pizza.

The phone call was from the budget director for newly inaugurated President George W. Bush, who had settled down in the White House only a few days before. After the two men exchanged pleasantries, Mitch Daniels got down to the task at hand – making the 45-year-old founder and director of the prestigious Harvard University-based “Center for Risk Analysis” an offer he couldn’t refuse.

“The President wants to nominate you to be the next director of ‘Oh-EYE-rah,’” said the affable OMB executive, who also ranks as one Bush’s closest advisors and friends. “You’ll probably come up against some opposition in the Senate [during confirmation proceedings], but there’s no doubt you’ll eventually be confirmed. The job is yours, if you want it.”

Listening hard on his end of the line, John Graham felt his pulse kick up a notch. As most “inside-the-beltway” Washingtonians will quickly tell you, running “Oh-EYE-Rah” (also known as the federal Office of Information and Regulatory Affairs, or OIRA) is one of the most exciting and creatively challenging jobs in the entire executive branch of government. Under enabling legislation that was first passed during the Jimmy Carter administration, OIRA is charged with reviewing, evaluating – and in some cases rejecting – more than 600 major new regulations proposed by federal agencies each year.

First activated by Ronald Reagan (his critics said he used the office to “quash” federal regulations he didn’t like), the Office of Information and Regulatory Affairs was established in order to provide the executive branch with an effective method for scientifically and objectively reviewing proposed agency rules and regulations, in order to eliminate those based on incomplete or inaccurate data. Although the supposedly non-partisan OIRA director must maintain a low profile in Washington and hardly ever winds up on the “CBS Evening News” with Dan Rather, the job actually carries enormous political clout. That’s because the “regulatory czar” (as he or she is informally known on Capitol Hill) has the power to shoot down new agency regulations that can ultimately affect millions of citizens – while also costing corporations, institutions and state or local governments hundreds of millions of dollars.

As one might expect, however, there’s a high price to be paid for this kind of out-sized bureaucratic power in the fiercely competitive political arena that is Washington, D.C. What does history have to teach us about “czars”—and about how they usually end up?

As a book-devouring and endlessly energetic liberal arts undergrad during the late 1970s, Graham learned his Russian history well. But that didn’t stop him from putting his head in the noose on that January day almost two years ago. After 11 years of running one of the country’s most highly regarded, high-tech cost-and-benefit analysis think tanks under the auspices of Harvard University (where he also taught in the School of Public Health), Graham understood that fate had tapped him on the shoulder and was summoning him to join the great battle against waste, inefficiency and “fuzzy thinking” in the capital city of the greatest nation on earth.

He started packing immediately.

Within a few days of the White House announcement that Bush would nominate Graham for the post of OIRA director, liberal Democrats and avid environmentalists across the nation were teaming up to decry the nomination as a shameless, pro-business attempt to “gut” federal regulations that protect water and air quality, among other causes held sacred by many of the anti-corporate types who supported Al Gore in 2000.

Responding to violent criticism from such groups as Ralph Nader’s Public Citizen think tank (which charged Graham’s Harvard-based Center For Risk Analysis with “shilling” for the corporations by sometimes questioning the value of sinking millions of dollars into tighter regulation of industrial polluters, rather than, say, focusing on the importance of seat belts or avoiding fatty foods), Graham insisted that OIRA’s role under his leadership would simply be to provide better analysis and assessment of proposed regulations. Said Graham at the height of the debate last summer: “There is no grandiose plot to roll back safeguards. This administration is simply pursuing an agenda of smarter regulation.”

Graham also pointed to his 11-year track record at the Center for Risk Analysis, during which he had frequently come out against American corporations – with recommendations that would require some American industries (such as coal-fired power-plants) to spend a great deal of money protecting the public with expensive pollution-control systems.

Because he had become known as a fierce critic of “bad regulations,” however, Graham was regarded in liberal circles as a reactionary who had committed the unforgivable sin of charging federal regulators with more than 60,000 “statistical murders” – unnecessary deaths that he attributed to poorly conceived and illogical federal regulations that actually caused more harm than good. According to Graham’s hard-nosed and high-tech risk-assessment studies, somewhere between 2,000 and 4,000 Americans have been killed in automobiles in recent years because they were riding in cars that had been made lighter and more fragile – for no other reason than to meet new EPA regulations demanding more fuel-efficient automobiles.

While denying that he has a “pro-business bias” at his confirmation hearings in May of 2001, Graham told a panel of skeptical senators that his Harvard center was careful to avoid “pro-business bias” . . . and that his analysts and data-crunchers were content to “follow the scientific data and analysis, wherever they lead us.” In the end, the senate bought his argument, but barely – and he was confirmed by a narrow margin of 61-37.

“I can tell you one thing, for sure: The transition from being in a university setting to Washington is quite substantial,” said Graham. “For me, it’s been a real adjustment process – but I can’t say that I was surprised by the exercise. Still, the good news is that a lot of the people who were criticizing me prior to my confirmation are now finding common areas in which we can work together on constructive solutions. After you live here for a while, you begin to realize that this is how Washington works.”

Ask veteran Professor of Communication Allan Louden to explain why his former student was willing to endure the agonies of confirmation as “regulatory czar” (to say nothing of the storm and stress that goes with actually holding down the post), and the longtime director of the Demon Deacons debating team will tell you that the new OIRA chief was one of the “most driven competitors” he ever coached.

“I watched John compete in the National Debate Tournament in Denver, back in March of 1978,” says Louden, now in his twenty-sixth year of teaching. “He handled himself brilliantly, and even though we lost in the quarterfinals, he maintained his composure and his sense of humor. He was extraordinarily intense, but also very cool.

“To be a good debater, you have to be a fast thinker who can digest immense amounts of information, then sort through it on the spur of the moment to make your point with speed and power,” says Louden. “John had a natural gift that allowed him to do those things almost effortlessly. He was also a relentlessly hard worker, often putting in 40 or 50 hours during a week to prepare for an upcoming debate. If you think about it, those are the very qualities that are required for his current job at OIRA, where he has to make quick decisions involving huge sets of data, and often while listening to conflicting opinions from the experts in the federal government. I’m not surprised that he wound up in this kind of job, and I suspect that he’s enjoying the challenge fully, in spite of the stress!”

As the son of a former president of U.S. Steel (Graham grew up in Pittsburgh and earned a Ph.D. at Carnegie-Mellon University there after leaving Wake Forest), he says he long ago became accustomed to having other people accuse him of a pro-business bias. Yet he insists that his real motivation is public service – and that it took shape during his formative years in Winston-Salem, between high-voltage debates over public policy and philosophy.

“I’m certainly not an enemy of federal regulation,” he says with a soft chuckle, while relaxing with his sleeves rolled up at his office in the Old Executive Building next to the White House. “All I want is for it to be smarter. And I do believe I learned some things during my years at Harvard that will allow us to bring a new kind of keen, scientific rigor to many public issues, such as energy, transportation, manufacturing and so on.

“I’m convinced as never before that good public policy requires much more than good intentions. It requires a solid factual foundation. And what we find here at OMB is that many well-intentioned regulations need to be refined and improved, based upon science and engineering, in order to convert them into constructive public policy. That’s what this office is all about – bringing the perspective of science and engineering and economics into the process of making regulations.”

How does Wake Forest fit into all that?

“Oh, that’s an easy one,” says Graham, the champion debater of 1978. “I think everybody who goes to Wake Forest gets a huge exposure to the ‘public service’ philosophy that the university lives by. And I can tell you that both my wife Susan and I are to this day still advocates of what we call ‘The Spirit of Wake Forest.’ In our view, that spirit is built on two basic foundations. One is the value of a liberal arts education, and the other is the value of public service.”

Freelance writer Tom Nugent, the author of "Death At Buffalo Creek" (W.W. Norton), frequently covers stories about the federal government.

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