The Dependent Origins of Independent Agencies: The Interstate Commerce Commission and the Rise of Modern Campaign Finance and Capture

Abstract

Independent regulatory agencies are some of the most powerful institutions in the United States, and we think of them today as designed to be insulated from political control. This Article shows that their origins were the opposite: this model first emerged in the late nineteenth century because it offered more political control.The modern executive’s design of unitary presidential control over most offices, along side “independent” regulatory agencies, took shape in the winter of 1886-1887. Congress repealed the Tenure of Office Act, giving the President the unchecked power to dismiss principal officers, and ending the Senate’s power to protect those officers. Shortly afterward, Congress created the Interstate Commerce Commission, the first model for the modern independent agency. These two statutes are a basic foundation for the modern executive branch: the unitary executive’s power over most offices, alongside independence regulatory commissions that are sometimes called a “fourth branch of government.”This structural change was triggered by a sudden and significant transformation in American campaign finance. In the nineteenth century, parties relied on “assessments,” officeholders paying a percentage of their salary as a kickback to their party. Due to the federal prohibition of patronage “assessments” in 1876 and 1883, the parties were forced to adopt our more recognizable modern system of large special interest campaign contributions. The Senate had less incentive to fight for its power over federal offices and assessment money, and it suddenly needed to increase its access to railroad money. The Interstate Commerce Commission was the Senate’s means of attracting that money. The existing scholarship on the Interstate Commerce Commission generally contends that Congress was “shifting responsibility,” decreasing its own power so that it could punt difficult issues and delegate them to a new commission. To the contrary, this Article shows that the Senate and the President were seizing power, not punting away thorny questions. The ICC was a rejection of a far more independent enforcement model (private civil litigation in federal or state courts) towards a model of shared political accountability model (a commission nominated by the President and confirmed by the Senate for six-year terms. This story shows how sudden changes in campaign finance triggered dramatic changes in constitutional design, and set the foundation for the modern executive branch.