ADMINISTRATIVE SABOTAGE.

• Author: Noll, David L.

Government can sabotage itself. From the president's choice of agency heads to agency budgets, regulations, and litigating positions, presidents and their appointees have undermined the very programs they administer. But why would an agency try to put itself out of business? And how can agencies that are subject to an array of political and legal checks sabotage statutory programs?

This Article offers an account of the "what, why and how" of administrative sabotage that answers those questions. It contends that sabotage reflects a distinct mode of agency action that is more permanent, more destructive, and more democratically illegitimate than more-studied forms of maladministration. In contrast to an agency that shirks its statutory duties or drifts away from Congress's policy goals, one engaged in sabotage aims deliberately to kill or nullify a program it administers. Agencies sabotage because presidents ask them to. Facing pressure to dismantle statutory programs in an environment where securing legislation from Congress is difficult and politically costly, presidents pursue retrenchment through the administrative state.

Building on this positive theory of administrative sabotage, this Article considers legal responses. The best response, this Article contends, is not reforms to the cross-cutting body of administrative law that structures most agency action. Rather, the risk of sabotage is better managed through changes to how statutory programs are designed. Congress's choices about agency leadership, the concentration or dispersal of authority to implement statutory programs, the breadth of statutory delegations, and other matters influence the likelihood that sabotage will succeed or fail. When lawmakers create or modify federal programs, they should design them to be less vulnerable to sabotage by the very agencies that administer them.

TABLE OF CONTENTS INTRODUCTION I. FUNDAMENTALS A. Defining Administrative Sabotage B. Sabotage, Slacking, Drift, and Capture C. Normative Objections to Administrative Sabotage D. Sabotage's Legal Position 1. Evidentiary and Separation of Powers Obstacles to Judicial Review of Agency Sabotage 2. The Take Care Clause 3. Administrative Law 4. Administrative Sabotage in the Courts II. THE POLITICAL ECONOMY OF ADMINISTRATIVE SABOTAGE A. Demand for Statutory Retrenchment B. Sticky Legislation C. The Administrative State as a Tool of Statutory Retrenchment 1. Delegation 2. Presidential Administration 3. Partisanship and Polarization 4. Legal Culture 5. The Presidential Power of Unilateral Action III. HOW TO SABOTAGE A FEDERAL PROGRAM A. Mapping Tools of Sabotage B. Systemic Sabotage 1. Appointments 2. Nonappointments 3. Removal 4. Executive Orders 5. Budgeting and Spending 6. Agency Organization, Office Management, and Agency Procedure 7. Metarules 8. Stealth Science C. Programmatic Sabotage 1. Rulemaking and Adjudication 2. Big Waiver 3. Friendly Litigation 4. Enforcement Policy 5. Contracting and Grantmaking 6. Propaganda and Disinformation IV. LEGAL RESPONSES A. Against Cross-Cutting Reforms B. Anticipating Sabotage in Statutory Design 1. Constraining the Appointment of Agency Saboteurs 2. Limiting Statutory Delegations 3. Fragmenting Policy Implementation CONCLUSION INTRODUCTION

In 2010, Congress enacted the Dodd-Frank Act in an effort to address the market failures that triggered the 2008 financial crisis. (1) Following the recommendations of an article coauthored by then-Professor Elizabeth Warren, (2) the Act sought to regulate "unsafe" financial products that Congress believed imposed a variety of negative externalities on society. (3) Title X of Dodd-Frank, known as the Consumer Financial Protection Act of 2010, created the Consumer Financial Protection Bureau (CFPB) and charged it with enforcing eighteen consumer financial laws. (4)

In its early years under Director Richard Cordray, the CFPB pursued its statutory mission with zeal. The Bureau aggressively investigated predatory lenders, mortgage companies, and credit-card companies. (5) Information from supervision and enforcement drove rulemaking in areas such as payday lending (6) and debt collection. (7) Within five years, the Bureau was returning an average of $43 million per week from financial services companies to consumers. (8)

But in December 2017, Cordray resigned to run for governor of Ohio, (9) and President Trump used the Federal Vacancies Reform Act (10) to replace him with Mick Mulvaney, the director of the Office of Management and Budget (OMB). (11) A long-time ally of the payday lending industry, (12) Mulvaney once sponsored legislation to abolish the CFPB and stated at a House hearing that he didn't "like the fact that CFPB exists." (13)

At the helm of an agency he "detest [ed]," (14) Mulvaney moved to cripple it. Mulvaney declined to request money to fund the Bureau's operations; (15) installed "policy associate directors" (16) to shadow Bureau chiefs protected by the civil service laws; (17) rescinded, stayed, or delayed major rules on payday lending, overdraft fees, and student loan servicing; (18) and lent the Bureau's support to a constitutional challenge to the Bureau's structure, in which the petitioner asked the Supreme Court to "invalidate Title X." (19) According to one commentator, these actions left the CFPB in a "vegetative state." (20)

Mulvaney's attack on the CFPB and the Bureau's attack on Title X under him highlight an important gap in our understanding of the U.S. administrative state. From the Affordable Care Act to laws protecting consumers, financial markets, and the environment, major statutory programs are administered by executive departments and administrative agencies. (21) Scholars have long appreciated that Congress's delegation of authority to agencies creates risks of slacking, drift, and capture: agencies might perform their functions lethargically, (22) depart from Congress's preferences in administering a program, (23) or consistently advance the interests of a regulated industry. (24) But with a handful of recent exceptions, (25) scholars have not focused on the possibility that agencies might affirmatively attack programs they administer--a phenomenon this Article terms "administrative sabotage."

Administrative sabotage raises thorny questions. An influential strand of public choice scholarship views agencies as "budget maximizers" that continuously undersupply policy outcomes desired by Congress while maximizing their own budgets. (26) Why, contrary to this image, would an agency aim to put itself out of business? Is sabotage different than agency slacking and drift or merely an extreme form of those phenomena? Given the political and legal checks on agencies, how can they successfully sabotage a statutory program?

This Article offers a theoretical and legal account of administrative sabotage that answers those questions. The core claim is that presidents use agencies to pursue statutory retrenchment that is costly, if not impossible, to obtain directly from Congress. This affects our understanding of what agencies are. Agencies not only enforce, elaborate, and implement statutory policy but can undermine and dismantle the programs they administer.

I begin by making the case that administrative sabotage reflects a distinct mode of agency action. Part I offers additional examples of administrative sabotage, distinguishes sabotage from other kinds of maladministration, and explains why sabotage is normatively objectionable.

Part I also explains that sabotage exists in something of a legal grey area. The use of agency power to attack statutory programs encroaches on Congress's legislative authority, is in tension with the executive's constitutional duty to "take Care that the Laws be faithfully executed," (27) and violates statutory provisions that contemplate good-faith policy implementation. But concerns about intruding on a coordinate branch of government frequently prevent courts from effectively checking administrative sabotage.

Having defined administrative sabotage, Part II turns to its origins. Administrative sabotage is a tool for retrenching federal statutory programs. Demand for it originates in larger political and ideological opposition to an activist federal government. Yet sabotage would not occur were it not for other long-term trends in U.S. law and politics.

Those trends weaken presidents' ability to secure new legislation while strengthening their power over programs that have already been enacted into law. On one hand, the complexity of the legislative process and the distinctive politics of statutory retrenchment make it difficult for presidents to secure legislation rolling back enacted programs. On the other hand, Congress has delegated significant authority to agencies, presidents have expanded the White House's ability to control agencies through "presidential administration," congressional oversight has been weakened by the emergence of polarized political parties, and courts are increasingly open to reconfiguring or dismantling statutory programs based on creative legal arguments.

Constrained on the one hand and empowered on the other, presidents pursue statutory retrenchment that Congress will not give them through the administrative state. In Part III, I catalogue the tools available to a motivated administration for sabotaging statutory programs and analyze the likelihood that the tools will be checked by Congress or the courts. Overall, checks on administrative sabotage are inconsistent, and their effectiveness depends on contingent historical conditions such as partisan control of Congress. Sabotage, then, is not just a distinct mode of agency action but likely represents a new normal. (28) Particularly during conservative administrations, agencies are likely to use their delegated authority to attack disfavored programs.

Administrative sabotage complicates traditional accounts of the bureaucracy. After briefly...