Gary Gensler sent ripples through the crypto world with a mini-campaign announcing his view that the Securities and Exchange Commission can help regulate many digital tokens. One lawmaker, however, likely wasn't too surprised.
Democratic Sen. Elizabeth Warren, a vocal crypto skeptic and member of the committee that oversees the SEC, wrote to Gensler, the agency's chair, weeks earlier. In a five-page July letter, Warren outlined her concerns for consumers and put a full page of single-spaced questions to Gensler, which she supported with 25 footnotes to media reports, regulatory filings and gold-star policy research.
The SEC had already begun trying to enforce securities law on digital tokens, and Gensler, a Warren favorite with a history as an aggressive regulator, had begged for more authority from Congress. His responses to Warren, however, showed him going beyond mere pleas on an issue that has fallen between regulatory cracks — even in the face of ongoing skepticism from other lawmakers.
"The SEC has taken and will continue to take our authorities as far as they go," Gensler wrote.
In the era of email, lawmakers may dash off a couple letters a week to other parts of the government. Often, the missives are little more than press releases on congressional letterhead: complaints about gas prices, scoldings of scandal-plagued CEOs, generic support for kids and veterans or even favors for lobbyists.
Like Warren's prodding of Gensler, though, the occasional smart letter can work as an obscure policy lever, convincing agencies they have political cover to take on more controversial enforcement, interpret statutes more broadly and even dust off powers they've long abandoned, all without Congress taking a single vote. And in an era when successful votes are hard to come by, these letters, for better or worse, are sometimes the best lawmakers can do.
"When you hit a year like 2021 has been with Capitol Hill, you definitely have to look for external ways to tout your priorities," said Jonathan Schwantes, who spent nearly a decade as a lawyer on the Senate Judiciary Committee and is now senior policy counsel for Consumer Reports.
Warren isn't the only lawmaker whose letter-writing habit has gotten things moving in the executive branch. In April, for instance, Democratic Sens. Richard Blumenthal and Ed Markey pressed the National Highway Traffic Safety Administration to investigate a Tesla crash thoroughly, saying the carmaker's Autopilot feature did too little to make sure drivers are engaged. The agency opened a probe in August that will look into the issue across the company's vehicles.
Blumenthal has also pushed the Federal Trade Commission to issue rules on privacy, which the agency seems poised to try once it gains a third Democratic commissioner, while Markey has been the key voice in the Capitol urging the FTC toward its recent embrace of teen privacy online.
Letters rarely change policy alone, and often need to go hand-in-hand with other bully-pulpit activities. Washington denizens often describe speeches, hearings, bill proposals, letters to private companies and individuals and other moves short of passing laws as exercises in trying to nudge agencies.
Sen. Mark Warner, for instance, introduced legislation on digital design features that try to fool users into certain actions such as giving up data or opting in to paid services, and he addressed a commission workshop on the topic earlier this year. Last month, the FTC announced it aims to take on the practices, known as dark patterns, when they "trick or trap consumers into subscription services."
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Generating tech policy through stern letter-writing is not new. Even in the infancy of tech policy, a series of letters and hearings by former Republican Sen. Orrin Hatch helped spur the U.S. antitrust case against Microsoft, which was filed in 1998 and is still the most significant tech competition lawsuit to have finished.
"It certainly didn't hurt, and in some ways helped, because I think it called attention to the severity of the problem presented by Microsoft at the time," said Jeff Blattner, a one-time aide to Sen. Edward Kennedy, who helped oversee the case at the Justice Department. "It definitely helped to move the public debate toward enforcement."
Of course, a letter by itself can do little if a department or independent agency isn't interested in a lawmaker's view — and no matter how fancy congressional stationery or how stern the wording, a letter can't replace an actual law granting new powers or increasing budgets.
Those who have sent and received such congressional letters insist they're all valuable to the departments and agencies carrying out the statutes that lawmakers write. But former staff will concede that many letters are half-hearted political exercises, and only a small minority get most of an agency's attention.
Usually those more serious letters come from lawmakers with knowledge and power on a relevant issue, often a member of the committee that oversees the agency's policy area or else the panel that funds the agency. Those members of Congress, after all, can follow up with tough questioning at the next hearing or, in extreme cases, take out their frustration on an agency's budget. Specific queries and nuanced suggestions tend to trump hot rhetoric, and lawmakers often have better luck when agency leadership is in the same political party.
Agencies like the Federal Communications Commission are often deluged with letters that look more like signaling exercises for constituents.
"At the FCC, you would maybe get 30 to 60 letters a month," said Greg Guice, who ran the commission's Office of Legislative Affairs for three years after a stint as a congressional committee staffer. "Of those, you might get four or five from committee members."
The beginning of an administration can be a particularly fruitful time for lawmakers to write, as incoming leadership is already assessing where an agency's policies stand in trying to implement new ideas and priorities. The same is true of the period after an agency receives new mandates or funding in a major bill, such as the infrastructure package that President Biden plans to sign into law in the coming days.
That package, however, is one of Congress' very few recent major legislative accomplishments. Some former staff said the gridlock that has paralyzed the Hill and stops it from making progress on pressing tech issues may make letters all the more important. In some cases, a note to an agency may be one of the few levers of power readily available to those who are nominally charged with making laws.
Blumenthal, for instance, has admitted Congress "failed abjectly" to pass privacy legislation in explaining his hope that the FTC would "fill gaps" to protect consumers, while Markey has said his push for teen privacy online springs from his inability to get protection for them in the 1998 bill he helped pass on privacy for kids under age 13.
"Where the opportunities to advance new law on Capitol Hill are sort of diminished, agencies that have those abilities and have the charge from Congress to do them should," said Guice, who added that the Democrats in Washington are trying to charge up long-dormant agencies to regulate businesses, particularly on tech issues.
In some cases, agencies have abandoned powers they had, such as the FTC's decades-long reluctance to issue rules governing unfair or deceptive business practices after congressional pushback. A letter from a lawmaker could potentially help in that case, especially if combined with newly aggressive leadership on the same page as the lawmaker, like FTC Chair Lina Khan. In many cases, however, the digital economy has raised questions about privacy, competition and other issues that agencies are ill-equipped to address, at least in a comprehensive way, without congressional action.
That often leaves lawmakers hoping for a successful letter, but knowing that it's just one small step toward addressing the issues they're worried about.
"It is a way to raise awareness," said Schwantes. "As a pure political tool, it's an effective one. It's not as good as passing a law, it's not as good as holding a hearing, but it's up there."
A MESSAGE FROM POLY
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