Within the US Small Business Administration, one office is tasked with representing the needs of small businesses – typically defined as firms with 100 or fewer employees – to other agencies that make rules affecting environmental health and worker safety.

But instead of carrying out its mandated mission, this Office of Advocacy has for over a dozen years, dating back to the Clinton administration, been taking positions that favor large industry trade associations.



The results include weakened environmental and occupational health protections that affect millions of Americans, according to a report released today by the Center for Effective Government, a non-partisan government watchdog. In 2011 – the most recent year for which data is available – small businesses made up about 98% of all US businesses and employed about 39 million workers, or one-third of the US workforce.



Under a federal law called the Small Business Regulatory Enforcement Fairness Act, the Office of Advocacy is tasked with conducting reviews that assess the potential impacts on small businesses of regulations put forth by the US Environmental Protection Agency (EPA), the Occupational Health and Safety Administration (OSHA) and since 2010, the Consumer Financial Protection Bureau. But that “original intent has been distorted by big business who have hijacked this process”, said report co-author Ronald White, the center’s director of regulatory policy.

White and colleagues analyzed nearly 15 years worth of records from federal agencies – some obtained under the Freedom of Information Act – and conducted interviews with the relevant agencies. They found that the Office of Advocacy has consistently misrepresented small business views in comments submitted on rules proposed by EPA, OSHA and the Consumer Financial Protection Bureau. “The actions of both EPA and the Occupational Safety and Health Administration are constantly challenged by business lobbyists and industry trade associations who complain that curbing pollution, toxic waste, and workplace hazards costs time and money”, White and Katie Weatherford, the center’s policy analyst write in the report. “The biggest firms in the dirtiest industries usually protest the loudest.”



Of the 23 rules and 20 review panels White and Weatherford examined, they found that around half of the 17 rules finalized ended up with less stringent environmental and health standards as a result of Office of Advocacy practices.



Since 1998, the time period covered by the report, the Office of Advocacy has convened panels to review proposed rules on matters including safe drinking water, air pollution standards, lead paint removal and vehicle emissions standards. Such panels also reviewed proposals to regulate workplace exposure to formaldehyde and the heavy metals hexavalent chromium and beryllium, as well as diacetyl and crystalline silica – substances that cause debilitating and potentially incurable lung disease.

But rather than engaging small business owners or their representatives to advise these review panels, White and Weatherford found, the Office of Advocacy regularly turned to big business trade associations and lobbyists to comment on proposed health-and-safety rules. The resulting assessments often went well beyond small business concerns to encompass the positions of much larger and well-financed business entities.

In one case, according to the report, review panel comments resulted in less stringent US motor vehicle emissions standards. In another, a review of a rule to limit occupational exposure to carcinogenic hexavalent chromium, the researchers found that when OSHA attempted to exclude trade association representatives from serving as review panel advisers, the trade association threatened to sue the agency. The final hexavalent chromium standard was significantly weakened, White said.

The EPA, OSHA and the Consumer Financial Protection Bureau all lack formal procedures to verify that Office of Advocacy panel advisers qualify as small business representatives, according to the report. It also details a lack of transparency in the review panel process, including blocking timely public access to identities of panel advisors and their comments, and inadequate conflict of interest policies for such panels.

“Our organization’s experience echoes key findings of this report, that trade associations and the lobbyists they finance” are being represented “rather than the true interests of small business”, said David Levine, executive director of the American Sustainable Business Council, which represents more than 200,000 businesses across the country. His organization has only been contacted by OSHA once for participation on a rule-making review panel, said Levine, and the Office of Advocacy turned down the council’s requests to share information and participate in review of new Clean Water Act provisions.



This is not the first time that the activities of the Office of Advocacy have been questioned by government watchdogs. A 2013 report by the Center for Effective Government found that the Office of Advocacy had inappropriately interfered with federal scientific assessments of three carcinogenic chemicals by representing large industry trade association positions rather than those of small businesses.

Reports released in 2011 and 2013 by the Center for Progressive Reform also found that the Office of Advocacy had been representing views other than those of small businesses. The Government Accountability Office, the research arm of the US Congress, independently confirmed many of these charges in 2014.

Among its recommendations, the center believes that the Small Business Administration must regularly verify that Office of Advocacy review panel advisers represent small business interests, and improve public access to information on review panel participants and their comments. “The intent of this process can be realized if recommendations in report are adopted”, said White.



Levine said he expects American Sustainable Business Council members to raise concerns about the Office of Advocacy in meetings scheduled for later this week with Obama administration and Congressional representatives.



“That what’s good for the environment, health and welfare of citizens is bad for business – that was never accurate and it’s less true now”, Levine said. “The businesses we represent, like the bulk of businesses in the country, are mostly small and they are not anti-regulation.”

Due to the report’s release date and the Veterans Day holiday in the US, the Small Business Administration could not be reached for comment by press time.

Elizabeth Grossman is a freelance journalist who covers environment, science, occupational health and related policy issues.

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