When Regulatory Capture Turns Sinister

What happens when your idealism crashes into the harsh reality of life under capitalism? When your commitment to make the world a better place begins to directly conflict with your need for a stable income, health care, a home, and a family? This is a question that most radicals inevitably confront at some point. It’s also central to the new novel Testimony by Peter and Sarah Lazare.

Burned-out and broke, Sam Golden, Testimony’s central character, leaves the anti-globalization movement in the wake of 9/11 desperately in need of a decent job. By luck, he manages to land one at the Illinois Commerce Commission in Springfield, the state capital, where he is tasked with helping regulate privately owned utilities in the state.

The internal conflicts and rationalizations Sam experiences during his early days on the job are familiar to anyone who has ever wrestled with the thought of compromising their values and ideals for material improvement. In Testimony, these conflicts, along with the idiosyncrasies of working at a state regulatory agency, are presented with the detail and nuance that can only come from deep personal experience. In this case, that experience is the late Peter Lazare’s personal background of transitioning from a union organizer with the Socialist Workers Party to a twenty-year career at the Illinois Commerce Commission.

While he does not realize it at first, trading in street protests and placards for an office desk and a computer does not mean an end to Sam’s attempts to confront injustice. To the contrary: he gets sucked into a wild adventure of corporate corruption and post-9/11 “War on Terror” paranoia and has to call on his old ideals and commitment to action. The same is true for many in Sam’s ragtag group of collaborators who discover, rediscover, or reinforce their passion for justice as the plot thickens.

In this way, Testimony is inspiring, illustrating how activism and radicalism can move in phases and be situational, and how simplistic notions about “selling out” can be damaging and demoralizing, weakening the overall movement and contributing to social atomization.

You could probably count on one hand (or maybe one finger) the number of novels written about regulatory capture in the utilities sector. By design, this rent-seeking process — by which large corporations and elite interests use their wealth and power to influence and control the public individuals and agencies responsible for overseeing their activities — is supposed to be secretive, mundane, and so boring that it escapes public attention. Testimony manages both to provide highly detailed and accurate information about how regulatory capture works and to make this concept and its implications understandable and accessible.

Not long after Sam settles into his new job, he begins to realize something is amiss. Any illusions he may have had about the regulatory agency protecting consumers from the excesses of big business go out the window, as it becomes increasingly apparent that the company he is assigned to regulate, United Gas, owns the city and has every angle covered: personal relationships with his supervisors, sham charitable events, political connections, and, as a cherry on top, a burgeoning public-private partnership with various federal and local law enforcement agencies under the guise of protecting valuable infrastructure from “terrorism.” As Phil, another former activist (or perhaps infiltrator) turned industry shill, explains to Sam: “The Commerce Commission typically has a synergistic relationship with United, because our great partnership allows us to accomplish great things.”

When a neglected gas line explodes, killing a school janitor, Sam watches as this “partnership” shifts into high gear to protect the company. Appalled, and highly skeptical of the efforts by United officials and his supervisors to blame international terrorism, Sam’s old organizer instincts kick in, and he starts to ask uncomfortable questions and chase down leads. His effort quickly develops into a high-stakes game of cat and mouse that pits Sam and his comrades — including Allison, a local investigative journalist, and Wendy, a fellow Commerce Commission employee — against what, at times, feels like the entire Springfield establishment, backed up by the immense and sinister power of the federal government.

Ultimately, they uncover and expose damning information that not only directly implicates the company in the explosion but also reveals a shadowy web of bribery and intimidation that underpins United’s relationship with its regulators. By showing that there is a very thin line between regulatory capture and obviously illegal forms of corruption, Testimony does more than entertain. It provides a valuable public service, clearly demonstrating the limitations of a regulatory approach to dealing with corporate power.

It also subtly suggests that the only viable alternative is democratic public ownership. Early on in his tenure at the Commerce Commission, Sam takes his new colleague Greg to an offtrack betting parlor to share some of his growing concerns over United’s control of regulators and unjustified requests for a rate hike. Over beers and betting slips, Sam and Greg debate. While both agree that regulatory capture is a problem, Greg takes a more libertarian perspective, suggesting that regulations themselves are to blame for big business running roughshod over their smaller competitors. Sam counters that the only way to truly stand up for “the little guy” is to bring natural monopolies, like United, into public ownership and control.

At this, Greg balks, bringing up the case of Smith City Lights and Power, a local publicly owned utility that has a poor record. But Sam explains that public ownership is a flexible ownership form that is only as good as its design; and makes the case for a democratic public ownership model that will ensure genuine public control and enshrine new goals, such as the need to “go renewable and finally start to tackle the issue of global warming.”

Although set amid the paranoia and creeping authoritarianism of the post-9/11 period, Testimony is very much a modern novel. It speaks directly to the new generation of activists who have come of age during an era of recurrent and intensifying economic, social, and ecological crises. Activists who, on the one hand, are beginning to understand and confront the structural roots of inequality, injustice, and impending climate catastrophe; and, on the other, are facing their own personal dilemmas and challenges related to surviving within capitalism, while fighting against it.

Testimony is also a suggestion to modern activists that they should pay close attention to culture as both a terrain for contestation and a way to build knowledge and power. In writing a novel that manages to educate and entertain at the same time, Sarah and Peter Lazare have demonstrated and reinforced the importance of fiction as an organizing tool for a more equitable, democratic, and sustainable future.

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