A: There exists, to paraphrase President Eisenhower, a burgeoning 'Regulatory Industrial Complex.' The need for these industries to engage in 'regulatory risk management' is predominant.
The securities industry benefits from the existence of one, primary regulator in the form of the Securities and Exchange Commission, which has been at it since the mid-1930s. As a result, the industry has great familiarity with the SEC and its processes and there exists a well-developed body of precedent relating to SEC regulation and enforcement. When a rule or law regulating the industry is contemplated, Congress or the SEC seek and receive the input of the securities industry.
The regulatory environment with which the construction industry must interact is without a single, preeminent authority. The industry must comply with regulation, and resultant investigation if not enforcement, imposed by multiple entities simultaneously on the federal, state, and local levels. The construction industry must also often abide by private regulators in the form of monitors and so-called 'IPSIGs' [independent private sector inspector generals].
Q: How important is the construction industry to the economy of New York?
A: The importance of the construction industry to the economic vitality of New York and its people cannot be overstated. Much is made, appropriately so, of the value of a vibrant Wall Street. I believe that the overall value of a vibrant construction industry is every bit the equal.
First, the construction community for more than a century has been the leader in providing support to the middle class. The BTEA, for example, and its constituents members ultimately support more than 120,000 employees and their families through well-paying jobs with benefits, training, safety and security. These families, in turn, form the backbone of New York's rich tapestry of communities.
Q: Do builders get a fair shake from state and local regulators, and have regulations evolved?
A: As the regulatory environment has grown, I believe that it has also evolved. The people and public and private agencies that enforce regulatory compliance have become more familiar with the industry. That familiarity, however, has been drawn more from a prosecutorial experience than through dialogue.
That said, I would not characterize whether the construction industry is 'getting a fair shake' or not from any regulator. The regulators, especially those representing the public agencies responsible for taxpayer money funding a construction project, have a mandate to protect how that money is spent.
Consideration and understanding of the industry and its practices through dialogue is very much needed—it can only lead to a compliance environment that is more effective and inherently more 'fair' to the industry members. And, I note, this efficiency also benefits the taxpayers funding large capital projects.
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