The government in general and the regulatory agencies and independent commissions in particular have a heavy burden of transparency and documentation to justify their authority to promulgate regulations and issue judgments that have the force of law. Because they are not subject to the electoral oversight of the legislative bodies, there is a huge body of administrative law checks and balances in place to make sure that their actions are not corrupt or — and these are legal terms — arbitrary and capricious.
We cannot help concluding that arbitrary and capricious are the only possible explanations for the decision of the SEC to rescind two letters about proxy advisory services that have been in place since 2004. As we have noted earlier, they rescinded these rulings BEFORE the upcoming roundtable that will present expert testimony on many elements of the proxy system. It is mystifying to us that the Commission would act before receiving the benefit of this hearing. We followed up with the “for more information, contact” email in the very unforthcoming announcement of this decision and had a conversation right out of Monty Python. When we asked why the rulings that had been in place for 14 years were rescinded before the hearing, when the hearing would present testimony on the issue, the staff said it would “facilitate” the hearing. We asked how acting without evidence would “facilitate” the hearing and were told that it would facilitate the hearing.
Others share this concern, and so Rosanna Landis Weaver of As You Sow filed an FOIA request asking for any memoranda or notes from meetings from interested parties with staff (which must be kept and made publicly available with certain narrow exceptions). She received a reply saying that no such documents exist.
Curiouser and curiouser. Sounds pretty arbitrary and capricious to us.