Interesting question. The legislator is saying YOU PURPOSELY limited hiring; the regulator says THE LEGISLATURE had frozen starting salaries. This effectively does shift the blame but be careful - it is not shifting the blame for the scandals themselves!
Legislator: Your agency is responsible for regulating an industry shaken by severe scandals. You were given funds to hire 500 investigators to examine the scandals, but you hired no more than 400. I am forced to conclude that you purposely limited hiring in an attempt to prevent the full extent of the scandals from being revealed.
Regulator: We tried to hire the 500 investigators but the starting salaries for these positions had been frozen so low by the legislature that it was impossible to attract enough qualified applicants.
The regulator responds to the legislator’s criticism by
(A) shifting the blame for the scandals to the legislature
This is a trap answer. The regulator is not trying to shift the blame FOR THE SCANDALS to the legislature.
(B) providing information that challenges the conclusion drawn by legislator
Sounds fair enough. The regulator is providing information that challenges the accusation that there was a purposeful intent behind not hiring more investigators.
(C) claiming that compliance with the legislature’s mandate would have been an insufficient response
Nope. The regulator appears to be all on board with hiring more investigators if it had been possible.
(D) rephrasing the legislator’s conclusion in terms more favorable to the regulator
Nope. No paraphrasing or rephrasing to make the regulator look better in the response.
(E) showing that the legislator’s statements are self contradictory
Nope. The regulator only states that the legislature had frozen starting salaries. There is nothing about self contradictory statements being mentioned by the regulator here.
Hope that helps.