Each year the government somewhere or another, proposes hundreds of new rules and untold thousands of people comment. Writing effective comments is an art form it pays to get good at. Steptoe & Johnson law firm partner Matt Kulkin. shared some advice on Federal Drive with Tom Temin.
Insight by Recorded Future: Federal technology experts examine data strategies for cybersecurity in this exclusive executive briefing.
Tom Temin: Mr. Kulkin Good to have you on.
Matt Kulkin: Hi, thank you for having me.
Tom Temin: So you’ve written a little guide for people to make effective comments, why now?
Matt Kulkin: Well, really two reasons. First, the federal government is unveiling a revamped version of Regulations.gov. And that’s the portal through which the public can submit comments on proposed rulemakings. But also, I recently returned to private practice after several years stint at a financial regulatory agency. And I was struck by the different approaches that commenters took on our proposals, and some of them were more effective than others. And so we thought it would be timely to share some of those tips with interested parties.
Tom Temin: You were at the Commodity Futures Trading Commission?
Matt Kulkin: That’s correct.
Tom Temin: Yeah so that’s not what one that pumps out dozens of new rules a year or does it?
Matt Kulkin: Well, for a relatively small agency with about 700 employees, particularly post financial crisis and the adoption of the Dodd-Frank Act, it’s a mighty little agency that does a fair amount of work.
Tom Temin: Got it. All right and so what were some of the things people commonly did that were ineffective in commenting on a proposed rule that you saw?
Matt Kulkin: Well, when I would meet with my staff and we would debrief on the feedback we received, a lot of times we would get letters that were quite lengthy, but when you tried to distill the points into a summary or concrete recommendations, it was hard to distinguish from the generalities that were provided about the impact to a market structure or the way it might affect certain businesses. But it really wouldn’t delve into the specific details other than to say something was was either good or bad, and it makes it hard as a regulator to take that response and turn it into something specific. So when I work with clients now, we encourage them to pick specific components of the actual proposed rule text. And if there’s something they support, it’s important to say that. And if there’s a provision that they don’t like, it’s important to say that but also to provide the rationale for why as well as the solution to the problems.
Tom Temin: So for example, if the rule was going to cost my company XYZ dollars, you should state those dollars and say, but my cash flow last year was this much and my profit was this much, therefore it would have this effect on my cash flow and profitability.
Matt Kulkin: Well, yes, that’s right. Cost-benefit analysis is incredibly important. And it’s a component of the notice and comment process that a lot of commenters miss, but simply saying that your revenue or your profit will go down – that might not be a compelling reason for a regulator to take a comment. Because they’re usually looking at the public policy benefit, and they’re less concerned about the commercial effect.
Tom Temin: Got it. So therefore, then the corollary is comment on the public policy effect. If you think it won’t have good effect or any effect on behavior or something related to that policy, you should state why in the most specific terms you can?
Matt Kulkin: That’s right. And to use your example, if it is, in fact going to increase the regulatory costs associated with doing business. If it’s true that those costs will ultimately be passed on to the customer, then you can and should advise the agency that one of the unintended effects of the rule would be to increase costs for your service, which makes it less accessible to your customer.
Tom Temin: Yeah, and I guess if you get to that $100 million level, then you’re into major rulemaking and did you ever find that perhaps making a rule and proposing a rule the agency didn’t intend to get into the major level but then found itself after comments that maybe it was?
Matt Kulkin: Well at the CFTC, I never ran into that specific instance. And I guess I would say that’s in part because of the good counsel I received from our general counsel. And so we worked very closely with them to ensure that our rules were done in compliance with OMB directives, as well as the Administrative Procedure Act.
Tom Temin: All right, any other important pieces of advice that rule making commenters should follow?
Matt Kulkin: Well, I’d say there’s a couple things. One, it’s important to keep the letter focused and not to wax poetic. You have to remember the staff are going to review the letters and sometimes there are thousands of them. And they’re going to try and distill it into a few lines or make it into a chart. So the easier it is to lift something from your letter, the more effective it will be. I’d also something that happens more often than you think. The Federal Register will give a deadline for comments submissions, it’s really important to meet that deadline. It’s usually 30 to 90 days. You’d be surprised how often letters come in on the 31st or the 91st day.
Tom Temin: We’re speaking with Matt Kulkin he’s a partner at the law firm Steptoe & Johnson, and former director of the Commodity Futures Trading Commission. And let me ask you this when comments would come in, did staff in fact, read them all?
Matt Kulkin: Yes, yes, every single one. And I’d say also to commenters, filing the letter isn’t the last step. It’s really just the beginning. Most agencies staff are willing to and look forward to meeting with commenters, either by phone or in person, and being able to ask questions and engage in that dialogue. Not only is it helpful to the staff, but it can be incredibly effective for an advocacy campaign.
Tom Temin: And did you ever get mass reproduced comments, say from every pork belly producer or trader that were identical and how did you treat those?
Matt Kulkin: We did from time to time receive form comments, you know, at the securities exchange commission. For example, they recently adopted a rule called regulation best interest. And they received over 6,000 letters. And a lot of them were duplicative of each other. And so what the staff ultimately do is they give consideration to the – “relevant matter presented” are the magic words, and they summarize those letters as if it were one.
Tom Temin: Got it. So that means that large bulk volumes of similar comments don’t have any more weight than a really good comment that might come from one other person, but that the mass is taken as a single comment, or am I overstating it?
Matt Kulkin: On substance the point will be made, whether it’s from one commenter, or 1,000. You know, politically when you get into weighing the pros and cons of different policy recommendations, there’s certainly a benefit to the amplification of a message.
Tom Temin: Because I understood that under administrative procedures, that the weight of many is not something that a regulator is obligated to consider.
Matt Kulkin: That’s right. It’s not a weight contest. It about the merits of the argument. But if a letter generates 6,000 comments, for example, that will be given a different level of scrutiny internally than if it only received six letters.
Tom Temin: Sure. And what about the use of technology or machine reading or some type of artificial intelligence applied to when you get lots of comments to somehow sort out for the agency, what the gist of them is, or what the substance of them is, without having to read through each word? Is that something you looked at? Or do you think that’s a good way to approach comments?
Matt Kulkin: It can be useful, again, when you’re trying to demonstrate a broad array of interested parties, having letters that are either form-generated or through some sort of technological apparatus. That’s helpful because it sends the message to staff that it’s an issue near and dear to a lot of people’s hearts. But when the staff sit down ultimately to review the comments and incorporate that feedback into final recommendation for a final rule, it won’t necessarily be the case that the issue with the most letters wins the day.
Tom Temin: Sure. And you’re also writing that the submission of a comment is not the end of this participation by outsiders in rulemaking, but rather, there’s a lot of follow through and that you sometimes help clients now with that follow through. What can a party do once it has submitted a comment to continue with the agency?
Matt Kulkin: Well, it’s important that when the comment period closes, and this practice varies, depending on the agency, but at the CFTC, for example, we would regularly meet with commenters. And it allows the staff to better understand both the substance of the material, but also the context in which the commenter is providing feedback. And those conversations can be incredibly helpful, particularly when when you have government regulating private industry. It allows the public servants to better understand the marketplace or the industry that they’re looking at. And that back and forth can be incredibly valuable.
Tom Temin: And the federal rulemaking practices as operated by the United States federal government have been cited by some people as the gold standard for governments around the world. Do you believe that it is? And if so, where could it be improved?
Matt Kulkin: I’m very proud of the process. And we have – we’re very lucky here that we have dedicated public servants who are so committed to the rule of law. You know, Regulations.gov is getting a revamp, which will make access to the information easier. You know, if I had, I suppose, one challenge when I was working through these materials at the agency, it’s just that the volume of information can be so overwhelming, and making sure that we had our fingers on the right data point and were able to get it quickly can be a challenge when you’re working with something abroad application.
Tom Temin: I suppose anyone who’s ever tried to actually read the Federal Register has run into that issue.
Matt Kulkin: Yeah, it’s challenge to have to navigate either the Federal Register or the USC or Regulations.gov.
Tom Temin: Matt Kulkin is a partner at the law firm Steptoe & Johnson and former director of the Commodity Futures Trading Commission. Thanks so much for joining me.
Matt Kulkin: Thank you for having me.
Tom Temin: Find this interview along with a link to his commentary on commenting, at FederalNewsNetwork.com/FederalDrive. Subscribe to the Federal Drive at Apple Podcasts or Podcastone.