The U.S. Chamber of Commerce yesterday filed suit in federal court, charging two federal departments with illegally financing private consumer particpation in regulatory proceedings.
Separate suits filed here and in Baltimore charged the Department of Energy and the Department of Agriculture with paying the Consumer Federation of America to participate in regulatory proceedings despite lack of legal authority to do so.
The DOE action, filed here, charges that the agency is paying CFA to participate in an upcoming hearing into whether price controls and allocations should be reimposed on No. 2 heating oil.
The other action, which also names CFA as a defendant, was filed in U.S. District Court in Baltimore, and charges the Agriculture Department with paying CFA to analyze the economic impact of proposed net weight standards for meat and poultry on consumers.
The chamber is joined in both actions by Citizen's Choice, a pro-industry consumer lobby organization.
The suits challenge the legality of federal funding of consumer interests in regulatory process, a growing phenomenon in the government.
After the defeat in Congress last year of the proposed Consumer Agency, which would have represented consumer interests in many government proceedings, consumer advocates began, with the encouragement of the Carter administration, to initiate public funding efforts in each of several departments and agencies.
The Federal Trade Commission and the Environmental Protection Agency established special paid public participation programs under congressional mandate while several other agencies, like the Consumer Product Safety Commission and the Civil Aeronautics Board, started similar progrms without any congressional action.
In a press conference yesterday, the chamber alleged such funding was "beyond the legal limits" of DOE and USDA.
"The question of whom to subsidize on issues which vitally affect the public interests is best answered by the elected representatives of the people," said William G. Van Meter, senior vice president of the national chamber. "Congress, not agency administrators, should establish guidelines for public participation in activities carried on by these departments."
The chamber alleges that "such illegal funding of intervenors represents a gross misuse of taxpayers' dollars and will seriously bias agency proceedings."
DOE spokesman Donald Creed called that agency's intervenor funding "authorized and proper." He said the purpose of the funding was to "enable interested parties who are financially deficient to present their views to the department."
Creed said DOE has an opinion from the Comptroller General that such funding "is correct and proper action by the department and other government agencies." The purpose of the funding is to "broaden participation of the public," in agency proceedings.
The chamber suit alleges that "USDA has failed to show that CFA is indigent."
Creed said CFA qualified for the aid by showing DOE how the money it got would be spent, as well as the how much money it presently had available to do the job. Based on the full financial disclosure by CFA, Creed said, DOE granted the consumer group $87,000 for such costs as extra staff personnel, out-of-pocket expenses like long-distance phone calls, financial and economic consultants and attorneys' fees for CFA's participation in the heating oil hearings on Aug. 21.
CFA's work on the project began last March, but the group has only received $15,000 thus far. It must submit monthly progress reports itemizing expenses, in order to receive funding.
CFA director Kathleen F. O'Reilly called the lawsuits "the latest evidence of industry's increasing sour grapes mentality."
USDA Consumer services director Carol Tucker Foreman also cited the General Accounting Office ruling allowing such funding, and pointed out that CFA won the contract from USDA in a competitive bidding situation. Foreman served as director of the CFA before joining the Carter administration.