Reinventing the Government Corporation
92 Pages Posted: 16 Jan 2016
Date Written: 1995
In this article, Professor A. Michael Froomkin takes a comprehensive look at federal government corporations, focusing on the legal implications arising from their character as both public and private entities. Federal government corporations often enjoy public advantages, including national establishment, tax and securities law exemptions, sovereign immunity, and privileged access to capital. As a result, they face diminished market discipline and may not be as efficient as their proponents claim unless they have similarly situated competitors. Because some federal government corporations are owned wholly or partly by private parties, yet maintain control over public funds and functions, their legal status raises important constitutional questions concerning accountability, separation of powers, and nondelegation.
In his 1993 Reinventing Government program, Vice President Al Gore encouraged the proliferation of federal government corporations, obscure government devices whose legal status remains unclear even after 200 years as part of our national life. Professor Froomkin suggests that some regulatory reform is needed before this suggestion is adopted. After a critical analysis of existing proposals, he offers alternatives designed to increase accountability to both government and market discipline, thus ensuring that private parties do not profit at public expense, and limiting taxpayer liability in the event of insolvency.
Keywords: government corporations, Gore, federal government corporations, administrative law, Froomkin
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