A proposed law would prohibit any individual who has been employed as

A proposed law would prohibit any individual who has been employed as a lobbyist on behalf of a particular industry from serving as the director of a government agency charged with regulating that same industry. The purpose of the proposed law is to prevent conflicts of interest. However, if passed, the law would prove counterproductive because it would prevent individuals who are knowledgeable about industries from serving as government regulators.

The argument above depends most directly on which of the following assumptions?

(A) The individuals in government that hold the power to enact the proposed law are susceptible to influence on the part of industry lobbyists. Incorrect

(B) Government has a legitimate role to play in the regulation of most industries. Irrelevant

(C) Only individuals who have served as lobbyists on behalf of an industry are knowledgeable about that industry. Correct

it supports argument conclusion, if only lobbyists are knowledgeable and they cant serve as the director of a government agency in that industry then the law should be counterproductive

(D) Those who have served as lobbyists on behalf of an industry are capable of objective, unbiased decisions as regulators. Incorrect

it supports conclusion

(E) The primary objective of government regulation of industry should be to strengthen and support that industry Irrelevant

Think the OA (C) is flawed.
(C) is too extreme and not necessary for the argument. Even if other people are knowledgeable (i.e. negation of the statement), removing former lobbyists from the pool still reduces the number of knowledgeable candidates, which could make regulation less effective. The argument can hold without assuming exclusivity — it only needs to assume that former lobbyists are a valuable part of the talent pool.
(D) is a better assumption. Because if former lobbyists are biased, then excluding them isn't necessarily counterproductive. In other words, if they’re inherently biased, then losing their expertise might be a worthwhile trade-off for protecting the integrity of regulation.
Experts please help clarify. Bunuel