Law professor to take top regulatory post

BOSTON (Reuters) - Cass Sunstein, a leading constitutional scholar, said on Thursday he had agreed to take the post of regulatory czar in the incoming Obama administration, overseeing all governmental regulations.

The Harvard Law School professor will lead the White House Office of Information and Regulatory Affairs, an agency expected to assume a big role in Washington following recent financial scandals and turmoil on Wall Street.

"Confirmed," Sunstein wrote Reuters by e-mail when asked if he had agreed to the job, which includes oversight of government agencies ranging from the Environmental Protection Agency to the Occupational Safety and Health Administration.

Sunstein, 54, an informal adviser to Democratic President-elect Barack Obama and longtime friend, is a pioneer in the field of law and behavioral economics, which seeks to shape regulatory policy around the way people behave.

Obama, who takes office on January 20, has said regulatory reform would be one of his earliest initiatives and he would release a detailed plan for regulatory changes.

Like Obama, Sunstein is a graduate of the Harvard Law School and is well known in intellectual circles in Chicago. He taught at the University of Chicago Law School for 27 years before moving to his post at Harvard last year.

"Expect transparency to be a central theme in any Obama administration as a check on government and the private sector alike," Sunstein wrote in the Huffington Post last March.

Sunstein, also expressed concern that advisers to Obama might be "too deferential, too unwilling to question" his decisions because "so many people are treating him as a near-messiah."

"But I believe that his humility, and his intense desire to seek out dissenting views, will prove crucial safeguards," he added in the March article.

'BIG THINKER'

Obama promised last month to strengthen financial regulatory agencies and to crack down on runaway "greed and scheming" in a bid to restore stability to a reeling U.S. economic system.

He has already named veteran regulator Mary Schapiro as chairwoman of the Securities and Exchange Commission -- the U.S. markets watchdog criticized for recent failures involving investment banks and Bernard Madoff's alleged $50 billion fraud scheme -- and Gary Gensler to head the Commodity Futures Trading Commission.

"Sunstein is a big thinker in the administrative law world. He and Schapiro are both absolutely first rate," said James Post, who teaches corporate governance and business ethics at the Boston University School of Management.

"There are some big challenges. We've got a network of financial agencies that are not coordinated and sometimes they trip over one another and sometimes there are big gaps between what they do, and it's clear that that needs a whole rethinking," he added.

The agency Sunstein will lead is part of the Office of Management and Budget, which reviews draft regulations and oversees implementation of policies intended to make federal agencies more efficient, according to its mission statement.

A congressional report on Thursday highlighted the need for "significant reforms," saying financial authorities had failed to limit systemic risks and urging swift action to fix weaknesses in U.S. regulation.

(Editing by Peter Cooney)