Washington

By ROBERT MACKAY

Percy listens to horror stories of federal reg enforcement

THE CHAIRMANSHIP of even a subcommittee in Congress can be a powerful position from which to exert influence and to strengthen one's own political base among the electorate back home. This was demonstrated recently by Sen. Charles H. Percy, who exerts plenty of influence as chairman of the Senate Foreign Relations Committee but who used his position as chairman of the Governmental Affairs Subcommittee on Energy, Nuclear Proliferation and Government Processes to win some points with the voters back home.

As chairman of that panel, Percy decided to investigate the regulatory enforcement practices of federal agencies and he chose Illinos as the site for the study. Beginning lasr March, Percy held public hearings and meetings on the matter in Rockford, Quincy, Peoria and Chicago, giving himself plenty of exposure in his home state while he was conducting official federal business. He was a sympathetic ear for business, labor, consumer and environmental groups who had found themselves entangled in federal red tape and wanted to gripe about it to someone in authority.

That someone was the senior senator from Illinois, who would be up for reelection in two years. This is not to say Percy's intentions were purely political. But Percy, who found himself in a close race with Democrat Alex Seith in his last election because many voters felt Percy had lost touch with the people back home, obviously realized that conducting the study in Illinois — using his power of incumbency — could only help him politically. Perhaps those businessmen and labor leaders will remember later that Percy listened to them and showed concern for their problems and tried to right the wrongs done them.

Percy's subcommittee staff selected testimony from the hearings in Illinois and put together a report entitled "Enforcement of Federal Regulations." The report was submitted in late November to President Reagan's Task Force on Regulatory Relief. It identifies several problem areas in federal enforcement practices — inadequate notification procedures, problems in regulatory management, inspection tactics and methods for resolving cases —  and it sets forth recommendations for regulatory reform.

"I found that the people of Illinois by and large support the broad goals and purposes of federal regulatory laws," Percy said. "They want clean air and water, a safe and healthy workplace, and equal employment opportunities for everyone. However, they are also concerned and upset about the way many regulations are implemented and enforced." Percy said he encountered at the hearings fear, anger, frustration, annoyance and, at times, despair. "The cases . . . are typical evidence of the needlessly hostile relationship which has developed between the federal government and the American businessman." The report cites, among others, these cases:

•    A small silica production company downstate, the Illinois Minerals Co. in Elco, has averaged one federal inspection every 4.8 work days in 1981. In recent years, the firm has spent $743,000 —  almost 30 percent of its total product investment — to comply with federal rules, but has still been shut down four times, at a cost of nearly $400,000 in business.

•    The owner of American Brick Co. was threatened with a $1 million fine by the U.S. Environmental Protection Agency. But when in exasperation he agreed to settle, the fine was reduced to $50,000.

•     Bell Federal Savings and Loan Association in Chicago, which in the last 10 years added 28 women to the officer staff — of which women now comprise fully 38 percent — was charged with "deliberate and willful" discrimination over that same time period and threatened with an order to pay $1 million in back pay.

One of the more interesting cases involved Charles Rothschild, president of White's Drug Store in Winnetka, and the Labor Department. In March 1980, federal inspectors cited his drug store for paying its student employees subminimum wages. Rothschild had indeed been paying high school students 85 percent of the prevailing minimum wage, in accordance with federal regulations, but he did not know the regulations also required him to obtain a Full-Time Student Certificate. He was never told of that requirement Nevertheless, he was ordered to pay $5,000 in back wages. After spending $2,200 on legal fees, Rothschild settled for $3,200.

Percy's report made several recommendations including: federal agencies should develop information programs to help businesses understand their responsibilities under the law; agencies should be required to track the economic effects of their decisions on businesses and other groups; agencies should develop a "small claims" procedure for rapid review of simple en-forcement cases; individuals and firms should be provided timely opportunities to demonstrate that past violations or abuses have been corrected, and to have penalties reviewed, amended or removed; a high-level "ombudsman for federal regulation" should be created to handle inquiries about federal regulation in Washington, and a similar ombudsman's office should be established in each federal enforcement region.

Percy said he would offer legislation based on these recommendations to Congress during its second session, which was set to begin in late January. Even if his proposals are dismissed by official Washington, Percy's efforts will not be forgotten by those who testified at the hearings he chaired in Illinois.

34/February 1982/Illinois Issues