In this lesson we introduce the concept of administrative agencies, through the rest of this module we'll see how administrative agencies work to regulate various aspects of commerce. But in this lesson we just talk about what administrative agencies are? Which categories that can fall into? In this lesson we introduced the idea of administrative agencies. I got to say, "Administrative agencies is not my favorite topic." But they're super important, in fact most of your encounters with "the government" especially the federal government are impacted a lot more by the work of administrative agencies than by the work of Congress or the president directly. So, administrative agencies do a lot of the heavy lifting in terms of regulating especially business. So in this lesson we're going to sort of introduce the idea of administrative agencies and the types of regulations they can pass, we are going to categories administrative agencies and then in the future lessons in this module will dive into some specifics of how administrative agencies function? How they make rules? How they enforce those rules? Examples of some really prominent administrative agencies that regulate a lot of business type of activities. So, what are administrative agencies? Well they are government entities that are housed in the executive branch. So we have the executive, the legislative, the judicial branch of government all the administrative agencies are housed in the executive branch or have some connection to the executive branch. In general they make rules, investigate violations of those rules and enforce the rules. So basically an agency is a mini government unto itself, it performs legislative tasks by making rules, it performs executive tasks by investigating those rules, it performs a judicial tasks by enforcing those rules. Administrative agencies even have their own little courts inside of them, so they do a lot. Now, every administrative agency only has power because Congress passed some statute that gave it power. That statute that gives an administrative agency power is called it's enabling legislation. No administrative agency can function without some enabling legislation whereby Congress delegate some of its power to this administrative agency to make rules and investigate those rules. In general there are three categories of administrative agencies. First is what's called an executive agency. Executive agencies are firmly housed within the executive branch. The head of the agency serves at the pleasure of the president. Executive agencies generally have to do what the president says, so the president sets the policy for these executive agencies and an example would be like the Federal Bureau of Investigation the FBI. The head of the FBI is appointed by the president, and the president has the freedom to remove the head of the FBI and replace him or her with somebody else. We've seen this happen fairly recently actually, the president has the discretion to do that. Contrast that with an independent agency which is not actually housed with any cabinet level department. Independent agencies are governed not by one head usually, but by a board that typically has to be bipartisan. So take for instance the Federal Trade Commission, it's governed by a board, the board of commissioners. Within the Federal Trade Commission enabling legislation it is stated that the board has to be as bipartisan as possible. So if there are five members of the board no more than three can be from one political party the other two must be from the opposing political party. The president appoints the board members but does not have the power to remove them for any reason. So, this is why it's called an independent agency once the board members for an independent agency have been appointed. They don't serve at the pleasure of the president like the head of the FBI does. So, they are thought to be more independent for the president and therefore less influenced by political whims especially since the board has to be as bipartisan as possible. Then you have this third group which is called a hybrid agency. A hybrid agency takes some characteristics of executive agencies, some characteristics of independent agencies and brings them together. A good example of this is the Environmental Protection Agency the EPA. We're going to see a lot more about the EPA in a later lesson in this module. But as an example of a hybrid agency the EPA is not housed within any cabinet level department. So that makes it looks like an independent agency. But the head of the EPA does serve at the pleasure of the president, who has the power to replace him or her at his discretion. So, that looks like an executive agencies so it's kind of a hybrid. So there's two types of hybrid agencies the ones like the EPA that aren't housed within a department but their head serves at the pleasure of the president, or the other kind which is housed in a department but has a governing board that can't be easily replaced by the president. So to wrap up this lesson let's talk a little bit about what powers agencies actually have? In general they make regulations or rules to apply statutes so Congress passes a statute. So for instance say, "Congress passes some statute the Clean Water Act, to regulate water purity in the United States." It gives the Environmental Protection Agency the authority to make rules and regulations to enforce the Clean Water Act. So a statute passed by Congress can be pretty long but it can't take into account all circumstances that might arise that need to have a rule related to that act. So, Congress delegates power to an agency and says, "Hey as things come up and you need to interpret this statute and make rules to apply the statute we give you the power to do that." The process by which agencies go about creating these rules is governed by a law called the Administrative Procedure Act which was passed in 1946. It sets forth the rule making process, in the future lesson we're going to delve into this rule making process. What are the rules that an agency has to follow in order to make a regulation that becomes law? We'll see that in a future lesson. Two other laws that are very important to the operations of agencies or the Freedom of Information Act or FOIA and the government in the Sunshine Act. Both of these require agency hearings and agency communications and other matters pertaining to the way agencies operate to be open to the public. So, any member of the public can submit a FOIA request to administrative agency to find out certain information about how they have gone about making their rules or investigating or enforcing the rules? The government in the Sunshine Act requires most agency hearings to be open to the public. So we're not getting rules that are created in private without public knowledge or public input.
