Greenlighting Administrative Prosecution

Abstract

“Greenlighting” is the process whereby the heads of a combined-function federal regulatory agency determine whether to accept the staff’s decision to charge or not charge a target with a violation of law. The charging decision is often the most consequential decision point in a regulatory prosecution and typically sets off a settlement negotiation. Yet the charging decision is unchecked by legislative, executive, or judicial mechanisms. Greenlighting is an important accountability tool with respect to the staff’s prosecutorial discretion. It is often used to correct misalignment between the priorities of the agency heads and their staff. Yet greenlighting is controversial because of concern about confirmation bias; having approved a prosecution, the agency heads may be unable to render an unbiased decision when the case returns to them for the final adjudicatory decision.

Keywords: Administrative Law, Administrative enforcement, Administrative adjudication, accountability, confirmation bias, greenlighting, internal administrative law, public administration, principal-agent problem, best practices, Securities & Exchange Commission, Federal Trade Commission, due process,Federal