Bill Berkowitz
July 13, 2006

Dudley Do-Wrong of George Mason University

White House appears set to name Susan Dudley of GMU's anti-regulatory Mercatus Center to a key post at the OMB

When the George Mason University Patriots played their way into the final four of this year's NCAA men's national basketball championships, some called it the biggest NCAA Cinderella story of all time. While that feel good moment brought the university massive amounts of media attention, a lesser-known campus outfit has not so much been making headlines, as it has been making political waves.

George Mason University's Mercatus Center, which was recently described by the Washington Post's Al Kamen as "the staunchly anti-regulatory center," owes much of its existence to Koch Industries Inc., the oil and gas company run by the Koch (pronounced "Coke") brothers of Kansas.

Kamen's July 12 column reported that the Bush Administration is poised to name Susan Dudley, the director of the regulatory studies program at the Mercatus Center, as head of the Office of Management and Budget's powerful regulatory office.

"If appointed, Dudley would be the most anti-regulatory zealot within the Bush Administration, bar none," Scott Silver, the executive director of Wild Wilderness told Media Transparency in an e-mail exchange. "Her ideology is based upon a core belief that regulations are generally bad and there should be no regulation unless it can be proven to be cost effective and supported from within the market place."

Worse than Graham

Dudley, who has worked at the OMB as well as at the Environmental Protection Agency, would follow the controversial John D. Graham, "the cost-benefit champion who left in October," as head the OMB Office of Information and Regulatory Affairs. The relatively unknown office "approves all environmental, health and safety and other government regulations," Kamen reported. Graham, Kamen noted, "also served as an adviser to Mercatus."

"She could be 10 times worse than Graham, who at least appeared to have his limits," Bob Shull, the Director of Regulatory Policy at OMB Watch, told Media Transparency in a telephone interview. In anticipation of her possible appointment -- which would require Senate approval -- OMB Watch, a longtime government watchdog group, had been researching Dudley's body of work. "The only consistency that you find in her writings -- written comments that she's filed about various regulations and the pieces that she's written for the Mercatus Center -- is hostility to regulatory protections of the public health, safety and environment."

The OMB Office of Information and Regulatory Affairs is "an obscure office that has lots of power, and unfortunately most people don't have a clue as to what the office does," Shull added.

According to a post at Think Progress, a project of the Center for American Progress, Dudley, as the director of regulatory studies at Mercatus, has:

Opposed EPA plans to set tougher public health standards for smog.
Opposed lower-polluting cars and SUVs and cleaner gasoline.
Opposed air bags in cars, preferring to leave public safety decisions "to the market place."
Opposed stronger regulations for arsenic in drinking water, claming that there "is a wide range of uncertainty in the science surrounding the health effects of arsenic in U.S. drinking water supplies."
Opposed measures to curb global warming, stating that the "evidence regarding global warming and human contribution to it is mixed, and...if a slight warming does occur, historical evidence suggests it is likely to be beneficial, occurring at night, in the winter, and at the poles. Taking 'precautionary action' to protect human health based on a series of tenuous linkages would likely create a new set of risks."

Frank O'Donnell of Clean Air Watch called Dudley "a true anti-regulatory zealot" who "makes John Graham look like Ralph Nader."

Praises PERC

In December 2000, on the occasion of its twentieth anniversary, PERC Reports, a publication of the Property and Environment Research Center (PERC – formerly Political Economy Research Center), invited a handful of "friends and acquaintances" to "share their thoughts about free market environmentalism and about PERC, including their personal experiences." Dudley wrote:

Recently I was appointed to a new Virginia Environmental Education Advisory Committee. I will head a working group tasked with examining the resources applied to environmental education and identifying new resources to improve environmental education in our schools.

The first place I turned for ideas was PERC's Web site. Over the past twenty years I have come to value the refreshing and insightful ideas that PERC so eloquently espouses. At the Mercatus Center, we frequently turn to your publications for the research and principles needed to support our comments on federal regulations.

On your Web site, I discovered that Michael Sanera and Jane Shaw have updated their very valuable book, Facts Not Fear, and that PERC offers student materials and teacher resources designed to promote critical economic thinking about key environmental issues. These materials present a balanced, thought-provoking review of such issues as curbside recycling (is it really good for the environment?) and endangered species (why are whales threatened while chickens are not?). The environmental mystery format is an ideal way to engage young students and encourage their critical thinking.

I don't know how many times I have turned to PERC for thoughtful, principled discussions of environmental issues. I am never disappointed.

The Mercatus Center

According to SourceWatch, a project of the Center for Media and Democracy, the Mercatus Center was founded as the Center for Market Processes by Rich Fink, executive vice president of Koch Industries and former president of the Koch Foundations, who went on to found Citizens for a Sound Economy (now FreedomWorks). In the early 1980s the center moved to GMU where it merged with the Center for the Study of Public Choice during 1998 to become the James M. Buchanan Center for Political Economy. The Mercatus Center brand was developed in 1999 from the JBC.

In addition to receiving support from the Koch family, the Mercatus Center the Center "has received $80,000 from ExxonMobil since 1998," according to a profile posted at EXXONSecrets.org.

The Mercatus Center, 501(c)(3) tax exempt organization, has a description of itself on its website that is clear about its mission:

The Mercatus Center at George Mason University is a research center focused on improving our understanding of how societies transition to prosperity and remain prosperous over time. The findings of that research are then communicated to decision makers in a position to act on them.

Through the application of market process analysis, a uniquely George Mason approach.

Mercatus researchers and the students they work with seek to bridge theory and practice to better understand how market-oriented systems enable human well being.

Mercatus research addresses the conditions that enable good governance and successful economies, specifically: the drivers of social, political, and economic change, international and domestic economic development, entrepreneurship and the institutions that enable it, the benefits and costs of regulatory policy, and government performance and transparency. Mercatus researchers work closely with colleagues at George Mason as well as a growing network of leading scholars world wide.

The findings from Mercatus research are published and communicated to decision makers in a position to make use of them through a suite of targeted outreach programs and the media.

Mercatus Center programs include:

Capitol Hill Campus Capitol Hill Campus is the central outreach program of the Mercatus Center at George Mason University. The program bridges the gap between scholarship and policy by making academic research and methods available to policy makers, and grounding academics by making them aware of policy makers' need for relevant analysis of public policy issues. Mercatus does this through academic courses and other programs that are held on Capitol Hill.
Global Prosperity Initiative The Global Prosperity Initiative of the Mercatus Center at George Mason University invests in and trains scholars whose work addresses the question, "Why do some societies prosper, while others remain stagnant and poor?" Mercatus conducts research and then applies the findings to problems of international economic development as well as economic stagnation and decline in the United States.
Government Accountability Project The Government Accountability Project of the Mercatus Center at George Mason University helps policymakers improve the public sector management process by bringing research and analysis to agencies to develop quality information about their effectiveness. Better information about the effectiveness of programs enables policymakers to make informed decisions about allocating resources to programs that provide the maximum benefits to the public.
Regulatory Studies Program The Regulatory Studies Program of the Mercatus Center at George Mason University works within the university setting to improve the state of knowledge and debate about regulations and their impact on society through peer reviewed research, ultimately improving how government works in the regulatory arena.
Social Change Project The Social Change Project of the Mercatus Center at George Mason University supports a global network of interdisciplinary scholars whose research advances an understanding of social change. Scholars work to develop a science of liberty, or a more practical understanding of how to change occurs, toward a more free society.

The Center's Board of Directors includes: Frank Atkinson, Chairman, McGuireWoods Consulting, LLC; Tyler Cowen, General Director, Chairman of the Board, and professor of economics at George Mason University; Richard Fink, Executive Vice President and a member of the board of directors of Koch Industries, Inc., in Washington, D.C.; Manuel Johnson, Co-Chairman, Johnson Smick Group and a member of the Board of Visitors and the GMU Foundation Board of Trustees; Charles Koch, Chairman and CEO, Koch Industries, Inc., one of the largest privately held companies in America; Edwin Meese, III, Former U.S. Attorney General who is also the Ronald Reagan Distinguished Fellow in Public Policy and Chairman of the Center for Legal and Judicial Studies at the Heritage Foundation, and a Distinguished Visiting Fellow at the Hoover Institution at Stanford University; Dwight Schar, Chairman and CEO of NVR, Inc., a home building company that is one of the top five U.S. building companies; Menlo Smith, CEO, Sumark Capital; Vernon Smith, Nobel Prize winner in Economics and Professor of Economics and Law at GMU.

GMU, which counts Karl Rove amongst its distinguished alumni, was founded in 1957 and named after George Mason, an American revolutionary, patriot and one of the founding fathers. More than 20,000 undergraduates, postgraduates and doctoral students attend GMU campuses in Arlington, Fairfax, and Prince William Counties, with another campus in Loudoun County set to open in 2009. (For more, see Wikipedia's GMU entry.)

"What I find most frightening about Dudley is her advocacy for the creation of a 'Sunset Commission' which would operate under the authority of the President and would review federal programs deciding which would be terminated unless reauthorized by an Act of Congress," Wild Wilderness' Scott Silver pointed out. "Speaking at an economic conference shortly after the 2004 election, Dudley touted this idea suggesting that this 'would shift the burden of proof onto the regulations and require us to demonstrate that they are still needed.'"

"In practice, if five of the nine commissioners did not like a particular regulation, or found fault with a federal program such as the Food and Drug Administration or the Environmental Protection Agency, the commission could effectively kill that regulation, program or agency.

Silver maintained that "the harm of the President's long-standing abuse of signing statements would pale in comparison to what could be accomplished with this, entirely unconstitutional, anti-democratic commission."