Aggressive regulation is government’s money tree

Money TreeRegulation is now a growth industry. Aggressive prosecuting is the newest form of taxation, a money tree for government.

Government, colluding with its own regulators and leftist lawmakers, has quietly mapped out a carefully planned strategy, out of the public eye, to go after deep-pocketed businesses. And it’s working.

The strategy works like this:

Put as many laws and rules on the government books as possible, to multiply the ways a business can run afoul of laws, whether inadvertently or not. The average Floridian would be astounded to learn how much trial lawyers spend in Tallahassee each session to lobby for laws that allow plaintiff attorneys to scalp more money from businesses.

Encourage zealous behavior by regulators and prosecutors, and reward and promote the most aggressive regulators who are most successful at levying fines against businesses.

Make few distinctions between businesses that accidentally break a rule vs. those that knew it was a violation and did it anyway.

Try your case whenever possible in the press, to get more publicity and to gather the power of the press behind you. As attorney general, Charlie Crist was a master of this tactic. Due process is a casualty when the media is used to spread sensational accusations. Enlisting the aid of the press is a favorite tactic of unethical regulators and prosecutors like New York’s Eliot Spitzer.

Use regulations to pry money out of businesses to pay for government expansion. Creating big increases in the number of laws and rules means there’s no limit on how many dollars government regulators and prosecutors can siphon off to fund government’s growth. No prosecutor or regulator will admit it, but radically raising the amount of fines against businesses and corporate officers is a clever new way to tax.

Ignore the immense conflicts of interest that give regulators a financial incentive to widen their net and demand higher fines. They enrich themselves and enhance their own career paths by piling on massive fines and accusing their targets of conflicts they overlook in their own business dealings.

scales-of-justiceOh, I can hear the apologists from the left whining now. “Come on, Smith, these corporations were breaking the law, and they got caught.” The problem with that view is that lawbreaking is whatever a prosecutor or regulator says it is, as long as they can convince a judge or jury of their case. Or they win merely by browbeating the accused into a financial settlement.

The government is all-powerful. It holds all the chips. It has virtually unlimited resources and staying power to play favorites and go after who it chooses. It can outlast you by abusing the appeals process for years. Even if you are in the right, the government can choose to bankrupt you. You end up exonerated, maybe, but broke.

As a result, most businesses settle out for huge fines, rather than face an unknown outcome and protracted litigation that breaks the company, with no assurance of a just result if they go to trial. Settling becomes the only out in a governmental chess game that puts businesses on an unlevel playing field, a testament to the power of government to confiscate money.

To be sure, not all regulators and prosecutors are guilty of this abuse. But there is no greater hypocrisy than using government power to create new rules in the name of consumer protection, when the real purpose is to increase government revenue.

The real story here is that the left has figured out how to legally turn on the money spigot to fund its agendas and social engineering programs and expand the size of its agencies. Many prosecutors’ and regulators’ conflicts of interest mean that ethical behavior has become a casualty of the government’s game.

John R. Smith

John R. Smith is chairman of BIZPAC, the Business Political Action Committee of Palm Beach County, and owner of a financial services company.

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