(Adds reaction, background)
By Jason Szep
BOSTON Jan 8 Cass Sunstein, a leading
constitutional scholar, said on Thursday he had agreed to take
the post of regulatory czar in the incoming Obama
administration, overseeing all governmental regulations.
The Harvard Law School professor will lead the White House
Office of Information and Regulatory Affairs, an agency
expected to assume a big role in Washington following recent
financial scandals and turmoil on Wall Street.
"Confirmed," Sunstein wrote Reuters by e-mail when asked if
he had agreed to the job, which includes oversight of
government agencies ranging from the Environmental Protection
Agency to the Occupational Safety and Health
Sunstein, 54, an informal adviser to Democratic
President-elect Barack Obama and longtime friend, is a pioneer
in the field of law and behavioral economics, which seeks to
shape regulatory policy around the way people behave.
Obama, who takes office on Jan. 20, has said regulatory
reform would be one of his earliest initiatives and he would
release a detailed plan for regulatory changes.
Like Obama, Sunstein is a graduate of the Harvard Law
School and is well known in intellectual circles in Chicago. He
taught at the University of Chicago Law School for 27 years
before moving to his post at Harvard last year.
"Expect transparency to be a central theme in any Obama
administration as a check on government and the private sector
alike," Sunstein wrote in the Huffington Post last March.
Sunstein, also expressed concern that advisers to Obama
might be "too deferential, too unwilling to question" his
decisions because "so many people are treating him as a
"But I believe that his humility, and his intense desire to
seek out dissenting views, will prove crucial safeguards," he
added in the March article.
Obama promised last month to strengthen financial
regulatory agencies and to crack down on runaway "greed and
scheming" in a bid to restore stability to a reeling U.S
He has already named veteran regulator Mary Schapiro as
chairwoman of the Securities and Exchange Commission -- the
U.S. markets watchdog criticized for recent failures involving
investment banks and Bernard Madoff's alleged $50 billion fraud
scheme -- and Gary Gensler to head the Commodity Futures
"Sunstein is a big thinker in the administrative law world.
He and Schapiro are both absolutely first rate," said James
Post, who teaches corporate governance and business ethics at
the Boston University School of Management.
"There are some big challenges. We've got a network of
financial agencies that are not coordinated and sometimes they
trip over one another and sometimes there are big gaps between
what they do, and it's clear that that needs a whole
rethinking," he added.
The agency Sunstein will lead is part of the Office of
Management and Budget, which reviews draft regulations and
oversees implementation of policies intended to make federal
agencies more efficient, according to its mission statement.
A congressional report on Thursday highlighted the need for
"significant reforms," saying financial authorities had failed
to limit systemic risks and urging swift action to fix
weaknesses in U.S. regulation.
(Editing by Peter Cooney)