The Subpoenas are Coming: How Companies Should Prepare for Next Year’s Congressional Oversight Blitz

A tsunami of Congressional oversight is headed straight for corporate America. Barring a dramatic and improbable reversal of both current and historic political trends, Democrats will retake control of the House of Representatives (and possibly the Senate) in November's elections, ushering in two years of divided government. With prospects for passing major legislation during that period hovering between slim and none, oversight will become the leading substantive and political weapon for newly ascendant Democrats.

In some ways, this coming oversight wave will resemble past periods of Democratic control, with major focuses on both the Trump administration and the private sector. But due to two key changes in Congressional Democrats' thinking, the focus on corporations is likely to be more intense than ever, and executives who are not prepared risk being swamped by a legal, political, and media onslaught.

The first change stems from a widespread belief among Democrats that major corporations have drawn too close to the administration for comfort. For example, they have attacked crypto companies for allegedly funneling money to the president and his family, called antitrust review "pay-to-play corruption," and questioned the relationship between the White House and oil companies. For Democrats on the Hill, aggressive oversight of private companies is no longer just an end to itself, but a means for exposing alleged abuses by the Trump administration.

The second shift in Democrats' thinking stems from their experience in 2019 and 2020, the last time they held the House during a Trump presidency. During that period, House committees launched major investigations into alleged Trump abuses across a range of fronts and saw those investigations stymied by the administration's blanket refusal to turn over documents, even in response to subpoenas. Across every major investigation (Ukraine impeachment, Census questionnaire, Trump tax records, etc.), the administration executed a stonewall strategy that forced Democrats to go to court to pursue even basic requests, leading to years of litigation and documents being withheld until after Trump left office.

Democrats know the White House is likely to repeat that strategy and are already preparing alternative targets. They will probe the administration aggressively, but those efforts will be supplemented by piercing corporate investigations, both for companies with exposure to alleged administration shenanigans as well as industries that have traditionally fallen in Democratic crosshairs. To put it succinctly, why send a subpoena to a Cabinet agency that might produce documents in three years, when one to a company will produce them in three weeks? [See the appendix below for a partial list of industries that could be targeted.]

For their part, Republicans inside government will defend themselves and counter-attack, especially if companies appear to back away from commitments they made during the first two years of the Trump presidency. And should the GOP hold the Senate, companies will find themselves whipsawed between competing demands by the two parties.

There are a number of steps companies should be taking now to prepare for Congressional investigations, limit their impact, and even prevent them from being launched in the first place.

WHAT COMPANIES SHOULD DO NOW

At Vianovo, we have counseled numerous companies and executives through high-stakes Congressional investigations. One lesson that stands out in our years of experience: the companies that prepare in advance stand a much better chance of emerging with their reputations intact. The subpoenas are coming. The only question is whether companies will be ready.

APPENDIX: POSSIBLE FOCUSES OF DEMOCRATIC OVERSIGHT INVESTIGATIONS