As we reported in our prior client advisory on the wave of investigations to follow the pandemic, the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act established three new bodies to conduct oversight and investigations on pandemic-related issues. Separately, House Speaker Nancy Pelosi announced a special committee to conduct additional pandemic-related oversight. In recent weeks,
Brian D. Smith
Brian Smith provides strategic and legal advice on matters that require substantial political, reputational, or government relations considerations. He represents companies and individuals in high-profile or high-risk investigations, particularly congressional investigations, criminal investigations with political implications, and investigations related to political law compliance. He has significant experience in crisis management, where he advises clients facing combined legal, political, and media relations risks. His practice also includes the development and execution of government relations initiatives, including securing the U.S. government’s political support on behalf of U.S. companies facing international legal issues.
Past as Prologue: The Wave of Investigations to Follow the Pandemic Recovery and Actions that Companies Can Take Now to Prepare
On March 30, 2020, the inspectors general of several major agencies selected the Department of Defense Inspector General, Glenn Fine, to lead a newly created federal oversight entity that will investigate waste, fraud, and abuse in connection with the massive new coronavirus economic relief legislation. The inspectors general were exercising new authority contained in the…
Congress Creates New Oversight Functions for Coronavirus Relief
Although a final version of the Coronavirus Aid, Relief, and Economic Security (CARES) Act is not yet available, based on what we know so far, it appears that the legislation will include the provisions described below establishing oversight functions for the use of stimulus and bailout funds. According to a number of sources, the bill…
Drug Pricing Investigations in the 116th Congress
Consistent with popular predictions and our prior posts, Congress made drug pricing a key item on its investigative agenda in the first year of the 116th Congress. Several factors contributed to the uptick in congressional drug pricing oversight activity, including the elevation of new Democratic chairs in the House with longstanding interests in drug…
New Changes to Foreign Agents Registration Act Forms and E-File System
Following the Department of Justice’s announcement in March of an initiative to increase enforcement of the Foreign Agents Registration Act (“FARA”), the Department has rolled out a new e-file system for FARA registrations. Notably, the new system only applies to new registrants, although the Department indicated that it will transition existing registrants to the new…
Florida FARA Case Leaves Troubling Precedent
On May 7, 2019, a federal District Court in the Southern District of Florida ruled that an American company, RM Broadcasting, must register as a foreign agent under the Foreign Agents Registration Act (“FARA”) for its agreement to broadcast radio programming from Rossiya Segodnya (meaning “Russia Today”), a Russian state-owned news agency. Although the decision…
Appropriations Committee Directs New FARA Guidance on Commercial Exemption
The House Appropriations Committee has quietly directed the Department of Justice to issue new guidance on the commercial exemption to the Foreign Agents Registration Act (“FARA”) with respect to state-owned companies. The directive came in a Committee report accompanying legislation that provides funding for the Department for fiscal year 2020. The report was approved by…
Congressional Investigations and the Rules of the 116th Congress
With Congress heavily engaged in launching and pursuing new congressional investigations, particularly since the Democratic takeover of the House of Representatives, many of our clients have questions regarding the rules that govern congressional investigations. While many aspects of congressional investigations are not subject to any rules at all, the House, Senate, and their respective committees…
New Department of Justice FARA Opinion May Narrow the “LDA Exemption”
The Department of Justice’s FARA Unit appears to have signaled a significant narrowing in the scope of a major FARA exemption that is especially important to private sector companies, including U.S. subsidiaries of foreign corporations. The apparent narrowing of FARA’s exemption for those who register under the Lobbying Disclosure Act (“LDA”) appeared in an advisory…
Congressional Investigations After the Midterm Elections
Brian Smith delivered the following remarks during Covington’s post-election conference call with clients on November 8, 2018.
“Restoring the Constitution’s checks and balances to the Trump administration.” That’s what Democratic leader Nancy Pelosi promised in her speech after the elections.
Congressional oversight and investigations thrive in divided government, and Democratic leaders are already promising a new wave of oversight.
While the press and pundits are mostly focused on the likely political investigations – access to the President’s tax returns or investigations of the Trump Organization’s business activities – the House’s investigative agenda is much broader, and it has direct implications for many of our clients.
For example, when we last had a Democratic House and a Republican President, in 2007 and 2008, Congress conducted large investigations of drug companies’ sales and marketing practices, technology companies’ sharing of customer data, and the financial industry’s corporate practices. A decade later, these three sectors – pharmaceutical, financial services, and technology – remain prime targets for congressional scrutiny, along with energy, government contractors, and most other highly regulated industries.
Moreover, a lot has changed in the last decade to increase the congressional investigations risks.
First, more committees now possess dedicated and experienced oversight staff than ever before, and several committees have dedicated oversight and investigations subcommittees. We expect oversight activities from all the major committees next year.
Second, in recent years, several committees have modified their rules to give the chairmen unilateral authority to issue subpoenas – a practice that we expect to continue next year. Even though many investigations do not result in subpoenas, the potent threat of a subpoena – issued without committee vote or sometimes even notice – makes it much harder for companies to resist congressional demands.
Third, congressional investigations, which always ebb and flow depending on the political environment, have become much more consistent and a mainstay of today’s legislative process.
That trend has been driven, in part, by legislative gridlock, as Members turn to oversight and investigations as a way to affect policy, and private sector practices, that they cannot reach through legislation. With the Senate remaining in Republican control, House Members will have a greater incentive to pursue policy goals through investigations.
In predicting next year’s investigations, history is often a good guide.…
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