"When the town marshal hauls you to the village justice court for a traffic violation and you suddenly find that the marshal is also the town administrator, doubles as the justice of the peace and gets credits for his convictions, you are in trouble," says William F. Bagley.
And Bagley should know. As chairman of the Commodity Futures Trading Commission, Bagley for three years has been marshal, mayor and minister of justice for the nation's futures markets.
Bagley quit last week and in his letter of resignation to President Carter said it's time to stop what he called "the undue process" of law that's used by all federal regulators.
Like other commissions and agencies, the CFTC makes the rules, initiates enforcement actions, decides guilt and mets out punishment.
The inherent conflict of interest in those roles are pointed out last week by U.S. District Court Judge Gerhard A. Gessell, when he blocked consideration of a ban on children's television advertising by Michael Pertschuk, chairman of the Federal Trade Commission.
'By his use of conclusive statements of fact, his emotional use of derogatory terms and characterizations and his affirmative efforts to propogate his settled views," Perstchuk showed he'd already made up his mind on the issue, Gessel ruled.
Pertschuck must disqualify himself from the case and let other FTC members decide it, the judge ruled.
Gessell bought the argument of the sugar coated cereal peddlers and the toy touts that Pertschuck's action "will and does violate their constitutional entitlement to due process."
Sure, judge, but what is the farmer supposed to do when he spots a fox in the hen house?
Does calling out the dogs in a gentle voice protect the foxes's rights?
The problem is not that Pertschuck, the cop, did his job to well, or that Pertschuck the judge, whispered behind his robes.
The problem is, as Bagley told The President, that "the minds of men are simply not facile enough to fairly judge a defendant's culpability when vindication of the Commission's own prosecution and its own reputation are also at stake."
Even if Pertschuck hadn't admitted publically how he felt about twitting the taste buds of kids too young to read, he had already begun the "undue process" or regulatory action.
The FTC did not vote to have its staff investigate TV ads simply because it was curious about the issue. There was a problem, and the regulators acted.
To suggest, as the Pertschuck ruling does, that the decision could be made while the commissioners are still objective about the issue is at best naive.
As Bagley pointed out in a piece he wrote recently for Federal Times, when the CFTC authorizes its enforcement staff to begin a major investigation it acts more like a district attorney turning his assistance loose on a case than a judge reviewing an indictment.
Sitting in executive session the regulatory commissioners see masses of allegations, some of which will never become formal charges. The appointed regulators frequently determine the trust of the investigation through policy rulings.
Bagley's suggestion is to let regulators remain cops, and even let them continue to make the rules.
But get new judges, he suggests, recommending to Carter the establishment of a separate Court of Regulatory Affirars to "sever this so-called quasi-judicial function from all regulatory commissions."
It's not a new idea; there are objections that it would create an overly-legalistic regulatory system, a lawyer's paradise.