The fight over the leadership of the Consumer Financial Protection Bureau is assumed to be about President Donald Trump’s intent to deregulate finance. But it’s also part of a larger fight about separation of powers and the expanding authority of the executive, made clear by the Trump administration’s use, and abuse, of the law the president relied on to attempt to install Mick Mulvaney as acting director.
Trump doesn’t just want to undermine consumer financial protection with Mulvaney; he wants to end-run the Senate and install unaccountable loyalists throughout the government by executive fiat. Across the government, acting directors who were installed without Senate approval are quietly dropping the “acting” title from their name, suggesting they have every intention of overstaying their legal welcome.
The Federal Vacancies Reform Act, or FVRA, allows the president to install an acting leader of any federal agency or office where there is a vacancy. In the case of the CFPB, the debate is about whether the statute applies to the agency, whose specific line of succession would make Leandra English, the hand-picked deputy director, the acting director.
U.S. District Court Judge Timothy Kelly, a Trump appointee, sided with the president on Tuesday, refusing to issue a temporary restraining order blocking Mulvaney from office. English’s lawyers said they will push for a ruling on the preliminary injunction, which, unlike the temporary restraining order, they can appeal.
The CFPB fight is taking place against the backdrop of the Trump administration’s repeated violation of a FVRA provision that allows acting directors to serve only for 210 days, with the clock starting either when the vacancy is created or when a nominee is sent to the Senate for confirmation.
Trade publication Energy & Environment News highlighted this issue in a small story earlier this week. Reporter Hannah Northey cited several cases of acting heads installed under the FVRA dropping their “acting” titles in the past month — while still controlling policy at their respective agencies.
Dan Simmons, an expat of the American Legislative Exchange Council, has been presiding over the Department of Energy’s Office of Energy Efficiency and Renewable Energy. The Trump administration has not named a nominee for the Senate-confirmed position, and Simmons hit his 210-day time limit on November 16. The Department of Energy subsequently removed Simmons’s title of acting director, while stating he would still “serve in a leadership capacity” as a principal deputy assistant secretary. Simmons signed off on a proposal to overhaul energy efficiency standards the next day.
In other words, the Trump administration designated and then un-designated the acting director, ostensibly to comply with the letter of the law while violating its spirit. By keeping the leadership in place without the technical “acting director” title, they have circumvented the requirement for Senate advice and consent.
The Trump administration has also made such moves at the Office of Nuclear Energy, where former Acting Director Edward McGinnis is currently the principal deputy assistant secretary, and at the Advanced Research Projects Agency-Energy, where former Acting Director Eric Rohlfing is now listed as deputy director.
The FVRA grants the president the “exclusive authority” to make acting director appointments, but at the Interior Department’s Bureau of Land Management, Secretary Ryan Zinke named Brian Steed as acting director earlier this month. It is, in fact, illegal for Steed to serve as acting director, because deputy directors must work at an agency for 90 days before they can be named acting director. Steed joined the bureau in October, having previously served as chief of staff to Rep. Chris Stewart, R-Utah. Indeed, on the department’s website, Steed is listed as a deputy director of programs and policy and “exercising authority of the director.”
The Interior Department has responded to charges of an illegal appointment, saying that Zinke didn’t name Steed acting director; he just granted him “the delegated functions, duties, responsibilities and authority of the BLM director,” a spokesperson told E&E News. However, Steed was initially labeled “acting director” on the bureau’s website until environmentalists started raising questions, at which point the agency changed the title.
Earlier this year, the Treasury Department had Keith Noreika run the Office of the Comptroller of the Currency, a major bank regulator, as a “special government employee,” a position that allows individuals to avoid certain ethics pledges as long as they serve no more than 130 days in a 365-day cycle. Noreika served for over six months, which advocates and members of Congress called plainly illegal. After Joseph Otting was sworn in as confirmed OCC head Monday, Noreika finally stepped down.
Just on Wednesday, Commerce Secretary Wilbur Ross named a department under secretary, Karen Kelley, to “perform the nonexclusive duties and functions of the Deputy Secretary of Commerce,” after the prior acting deputy, Ellen Herbst, resigned. There has not been a nominee for this position since Chicago Cubs co-owner Todd Ricketts withdrew in April; this Senate-confirmed position has just been passed from one temp to the next.
In each of these examples, the Trump administration has relied on the FVRA to evade the Senate confirmation process, and, in most cases, has failed to nominate anyone to the directorship posts. These functionaries, installed across the government, are able to carry out duties unilaterally.
The White House claims it will nominate a CFPB director soon. But Mulvaney could serve up to 210 days after a nominee is named without any Senate oversight, perhaps longer if the administration strips away the “acting director” title. (Unless the courts toss him out sooner.)
In the meantime, there’s a credible question as to whether an employee of the Executive Office of the President, like Mulvaney, can serve as the head of an independent agency like CFPB. Mulvaney runs the White House budget operations, a position that could undermine CFPB’s budgetary independence.
On Tuesday, Sen. Elizabeth Warren, D-Mass., sent a letter to the White House asking why Mulvaney’s staff from the Office of Management and Budget had accompanied him to CFPB, and how ethics and record-keeping requirements apply in this situation. The Campaign for Accountability on Wednesday asked Congress to investigate Mulvaney over having OMB staff perform work for CFPB, despite being paid for a separate purpose. But by evading the Senate confirmation process, the Trump administration has limited Congress’s constitutional ability to have a say in those who run the executive branch.
Kelly, the federal judge overseeing the CFPB case, has dealt with these issues before. Before joining the bench, Kelly worked for Sen. Chuck Grassley, R-Iowa, perhaps the most ardent defender of legislative branch privilege in the Senate. Grassley raised questions about the status of Huma Abedin, a special government employee in the State Department under Hillary Clinton during the Obama administration. And he also criticized the Noreika appointment. “When you have an SGE [special government employee] running an agency, you open yourself to scrutiny of whether there’s potential for conflicts of interest,” Grassley said in October. “The executive branch should follow the rules and restrictions to the letter.”
The acting director games could also threaten the legitimacy of the rules and regulations those individuals authorize. The FVRA is clear that someone assuming the duties of an acting director without the legal protocols would not have the force of law behind their actions. Trump, then, is inviting legal challenges to a host of deregulatory activities.
It’s not that Trump would have difficulty getting his nominees through the Senate. Since 2013, the Senate confirms executive branch appointees with a majority vote. With Republicans in control, not a single Democratic vote is required for Trump to get his appointees confirmed. But floor time in the Senate is scarce, and Majority Leader Mitch McConnell is using it instead to ram through federal judges at a record-setting pace. It will be those judges who hear any challenge to the legitimacy of the no-longer-just-acting directors scattered throughout the Trump administration.
If you work at a federal agency where an acting director is attempting to burrow in without Senate confirmation, email us, not from your government account, at email@example.com.