The idea, called "regulatory capture" is associated with George Stigler. Posner's paper "Theories of Economic Regulation," Richard Posner, Bell Journal of Economics and management science, Vol. 5, No. 2, pp. 335-358, 1974. brought the idea ought very clearly as I recall but I am not aware of that quote in either.
Alex
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Alexander Tabarrok Department of Economics, MSN 1D3 George Mason University Fairfax, VA, 22030 Tel. 703-993-2314
Web Page: http://mason.gmu.edu/~atabarro/
and
Director of Research The Independent Institute 100 Swan Way Oakland, CA, 94621 Tel. 510-632-1366
