Preparing For Democratic Oversight Investigations

For the past several years, Republican majorities in the House of Representatives and Senate have dictated the agenda of Congress. But Democrats will take control of the House in January 2019, thereby regaining the ability to control committee and subcommittee agendas, hold hearings and issue investigative subpoenas.

Companies can expect the new Democratic majority in the House to employ these tools to vigorously pursue vastly different legislative and investigative priorities than Republicans. Indeed, Democrats such as Reps. Elijah Cummings and Adam Schiff have been vocal about perceived Republican efforts to thwart certain oversight committees' pursuit of various lines of inquiry, including the issuance of subpoenas. The Trump administration and companies doing business with the president are likely to be embroiled in oversight investigations, as are industries that have been targeted by Democrats in the past (e.g., pharmaceutical manufacturers, financial institutions, for-profit educational institutions, and oil and gas companies). Companies should anticipate, however, that House Democrats will launch a number of investigations beyond these likely candidates and should be prepared with a game plan for responding to a subpoena or other inquiry in the event they are impacted by one of these investigations.

Democratic Priorities

Congress enjoys authority under the Constitution to broadly investigate any matter as to which it can propose and enact legislation. As a result of that sweeping power, few companies or industries are beyond the reach of a congressional subpoena. Companies would be wise to look to a number of predictive sources when gauging their risk, including:

letter requests issued to companies by Democratic members of Congress; Government Accountability Office (GAO) reports requested by Democratic members of Congress; investigations being conducted by Democratic state attorneys general; press releases or other statements identifying priority issues of the individual members of Congress likely to take over leadership of key oversight committees and subcommittees; press releases or other statements touting the accomplishments of the Trump administration or identifying its anticipated priorities over the next two years; and oversight letters from Democratic members of Congress to the Trump administration. 1. Letter Requests. The rules of the Senate and House permit committees and subcommittees to issue subpoenas for witness testimony and document production. Each committee has its own rules governing authorization and issuance of subpoenas; these rules generally require a vote of the majority of members of the committee and/or authorization of the chairman. Under these rules, the minority party does not have subpoena power. However, members of the minority party frequently send letter requests to companies, seeking information to increase the visibility of an issue and potentially convince the chairman or majority members that a thorough investigation should be conducted. Because Democrats had no readily available legal mechanism to enforce these requests while they were in the minority, companies should assume that Democrats will likely issue legally enforceable subpoenas demanding similar information beginning in January 2019...