A Blue Wave Washes Over the House of Representatives

Tuesday, November 6, brought 34 newly-elected Democrats to Congress who, along with their party colleagues, will control the House of Representatives over the next two years. The logical next question being asked by ordinary citizens and corporations alike is, what does that mean for me?

Welcome to the 116th Congress in the age of Trump.

What can we expect when the Democratic House majority is sworn in this January? The answer lies in a nuanced understanding of how Congress and President Trump will engage over the next 24 months. While there will be some narrow opportunities for the House to cooperate with the president on legislation, it seems clear that the focus of this new Congress will be on oversight and investigations.

Let the Hearings Begin

Beginning in January, 21 new chairmen and chairwomen will hold a gavel that bestows upon them the full power of Congress to compel the Trump Administration to answer their questions. We can expect that each Committee will hold a series of high-stakes congressional hearings, collectively issue hundreds of document requests and subpoenas, and compel statements under oath and under penalty of perjury.

These investigative powers are part of our democracy’s system of checks and balances and they enable Congress uniquely to speak to matters of great public concern. Often, developments in these investigations are closely followed by the media; therefore, they carry great risk for anyone unlucky enough to be caught in the crosshairs.

What surprises most lawyers and others who engage with congressional overseers is that there are no hard and fast rules governing congressional investigations like there are for defendants in a courtroom. Traditional rules of scope, privilege, and confidentiality are recognized at the complete discretion of committee chairmen. In addition to public hearings, certain committees, like House Oversight, have the authority to conduct depositions behind closed doors. While a lawyer for a witness being deposed can certainly object to questions being asked by congressional counsel, the chairman is the sole arbiter of what objections he or she will recognize. This is just one small example of the differences between congressional inquiries and other disputes that are settled before a judge.

For those unfamiliar with the structure of the U.S. House of Representatives, the House Oversight Committee – which is the principal investigatory Committee - employs a massive staff of more than 80 professionals, nearly all seasoned attorneys, charged with the responsibility of oversight. Under House Rule X, the Oversight Committee may at any time conduct investigations of any matter, and the chair wields a unilateral subpoena. Beyond House Oversight, 14 committees currently permit their chairs to issue subpoenas on their own initiatives.

Focus on the Private Sector

While many of these inquiries will target President Trump and his administration, they will also extend to private actors who benefited from his administration’s policies or close relationships. Once targeted for inquiry before Congress, these private parties suffer great blows to their reputations and often face dual jeopardy as a subject of a Congressional inquiry that is also fighting off litigation in the courtroom.

Although the new leaders in Congress will be constrained by their legal ability to enforce their will if the subject refuses to cooperate, it is not the legal threat of contempt that persuades private actors to comply with congressional commands. Rather, it is the reputational risk that arises when positioned as an adversary to Congress that causes a CEO to respond.

Savvy observers know that Congress’ institutional powers are multiplied by its soft powers – in other words, Congress’ greatest asset is its ability to focus the attention of the media and the public on its investigations. Moreover, the plaintiff’s bar, investigative reporters, and other governments are force multipliers that supercharge congressional action, mostly obviating the need for Congress to seek legal enforcement of their demands. Often, the only thing tempering a congressional investigation is the public perceptions of fairness and overreach. If a chairman is seen to be issuing subpoenas too zealously or is pursuing an inquiry of narrow political interest, the public or the media might push back.

Over the next two years we can expect that the president and Congress will be trading blow for blow as they set the stage for the presidential election of 2020. It is likely that prominent members of industry will be targeted and will have to navigate the dangerous terrain of congressional prerogative and public relations that follows. Those that survive with reputation intact will understand that responding to Congress is both a legal and public relations effort, requiring nimble action, and steady hands.

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The FTI Journal publication offers deep and engaging insights to contextualize the issues that matter, and explores topics that will impact the risks your business faces and its reputation.

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Published

November 07, 2018