November 9, 2016

Post-Election Analysis 2016: Oversight & Investigations

Arnold & Porter

Key Takeaways - Oversight & Investigations


Our constitutional framework is designed to constrain what each branch may do by itself. For instance, federal courts interpret laws passed by Congress and determine the constitutionality of administration actions. Congress can pass legislation, but the President retains the right to veto a bill. The President may issue executive orders and agency directives, but they last only as long as the term of that Presidency, and can be voided by the courts.

One of the virtually unchecked tools available to the legislative branch, however, is the power of the majority to investigate and hold hearings. Congress considers oversight and investigations to be one of its core constitutional obligations, along with legislating, budgeting and appropriating funds, and consenting to administration nominees in the Senate. Historically, however, when the same party controls Congress and the executive branch, oversight of the administration is generally somewhat tepid—absent unusual circumstances. Given the poor relationships between seasoned Republican leaders in Congress and President-elect Trump, and general skepticism of his ability to govern with a measured hand, we expect the Republican-led Congress to exercise its oversight prerogatives to keep any overreach by the executive in check—up to a point. Republican committee leaders may be cautious about scheduling too many oversight hearings, given the opportunity such hearings would provide Democrats to question Trump Administration officials on camera. Moreover, most congressional Republicans will be leery of challenging a Republican administration to the extent it could harm their electoral chances in the mid-term elections. Nevertheless, the dynamic at play with President-elect Trump creates an unprecedented opportunity for Congress to use its oversight function to reset a balance of power that has shifted too far to the advantage of the Executive branch.

We can expect the Democratic minority to use some of the tactics Republicans used to thwart the Obama Administration from implementing its agenda. Congressional Democrats will shine as much light as possible on every misstep by the President-elect's administration as they keep an eye on the 2018 elections. Look for Democrats to attempt investigations of the new administration's activities (albeit without a gavel or subpoena power); seek audits and investigations by Inspectors General and the Government Accountability Office; filibuster legislation and administration nominees in the Senate; intervene in private litigation against the administration as amici curiae; and request administration ethics and law enforcement officials to investigate any misconduct, self-dealing, or abuses of power, and potentially demand a special prosecutor to investigate the President-elect or members of his administration.

Although congressional oversight hearings involving the executive branch can devolve into highly partisan political theater, the more credible and widely covered investigations tend to be bipartisan in nature, generally with private industry leaders on the hot seat. Witness, for example, September's Senate Banking and House Financial Services Committees' counter-punch hearings on Wells Fargo's creation of accounts without customer consent, at which both Republicans and Democrats vied to express outrage on behalf of consumers and constituents. Likewise, pharmaceutical manufacturers have been the target of high-profile bipartisan, bicameral hearings in this session of Congress, with joint demands for volumes of sensitive commercial information about pricing and cost. We believe pharmaceutical pricing will continue to be a focus for bipartisan inquiries in the 115th Congress, along with issues such as fraud, abuse, and industry consolidation in various economic sectors.

The committees with the broadest jurisdiction in Congress are the House Committee on Oversight and Government Reform (HOGR) and the Senate Committee on Homeland Security and Governmental Affairs (HSGAC). These two committees have been vested by their parent chambers with wide-ranging authority to investigate virtually any activities involving the federal government, directly or indirectly.


House. With Republicans retaining control of Congress, Rep. Jason Chaffetz (R-UT), a former public relations executive, will continue chairing HOGR in the 115th Congress. Chaffetz served as prosecutor-in-chief for Republicans in the 114th Congress, zealously investigating the Obama Administration on issues such as the preliminary inquiry into Benghazi; implementation of the Affordable Care Act; misconduct in the Secret Service, Drug Enforcement Administration, and the Environmental Protection Agency; Internal Revenue Service targeting of conservative 501(c)(4) organizations; and the Office of Personnel Management data breach. Rep. Elijah Cummings (D-MD), an attorney and former leader of the Maryland legislature, will continue to serve as ranking member on the committee, as he has for the past two Congresses. Despite their philosophical differences and the highly partisan charge given their committee, the two leaders have maintained a working relationship with each other. They toured each other's congressional districts before Rep. Chaffetz took the helm in 2015, and found common ground in the 114th Congress on issues involving the private sector, such as pharmaceutical pricing.

We also expect other House committees to conduct oversight on matters under their jurisdiction. For example, the House Energy and Commerce Committee's Subcommittee on Oversight and Investigations has a tradition of bipartisan investigations involving the federal agencies under its aegis and the industries they regulate. Such oversight has often resulted in sweeping legislative reforms, such as the Food Safety Modernization Act, passed after a series of hearings on food-borne illness outbreaks, and the Drug Quality and Security Act, enacted in response to the fungal meningitis outbreak.

Senate. HSGAC has jurisdiction not only over the functioning of the federal government, parallel to that of HOGR, but also over matters related to the Department of Homeland Security. Sen. Ron Johnson (R-WI) is likely to remain as chair. Sen. Tom Carper (D-DE) may move to the Environment and Public Works Committee as ranking member, leaving the full committee Democratic post to Sen. Claire McCaskill (D-MO).

As for the Permanent Subcommittee on Investigations (PSI), Sen. Rob Portman (R-OH) is likely to continue chairing the subcommittee. Sen. Portman is widely recognized as a collegial and effective senator. During his campaign against former Ohio Governor Ted Strickland, he noted that "referring to your opponent as the 'enemy' is part of the problem in Washington. I don't believe you can be an efficient senator if you believe that the people on the other side are your enemy." Although a staunch conservative, he is a pragmatic dealmaker with an understanding of how the executive branch works, having served as the Director of the Office of Management and Budget under President George W. Bush. He is likely to find ways to work across the aisle with Sen. Claire McCaskill (D-MO), who will likely continue serving as ranking member on PSI. PSI, with its broad investigative jurisdiction and its historic origins as "the Truman Committee" that exposed war profiteering in the 1940s under former Missouri Senator and President Harry S. Truman, has special meaning for Sen. McCaskill.


House. While HOGR's primary focus may remain on the government, the private sector will not be exempt from scrutiny by this committee and other committees in Congress. Recent examples include HOGR's bipartisan hearings in February and September on drug pricing. Congress's appetite to investigate various facets of pharmaceutical pricing, such as the role of pharmacy benefit managers, investors, patient assistance programs, rebates, discounts, and federal healthcare policy, has been whetted in the 114th Congress, and we expect additional focus on the pharmaceutical sector in the next Congress.

Even when congressional oversight ostensibly targets governmental actions or programs, corporate entities and individuals can be drawn in as sources of information and/or witnesses, particularly if they are government contractors or grantees. If a Trump Administration bristles at inquiries from the legislative branch (let alone flatly refuses to accommodate congressional requests), committee investigators will turn to additional sources, such as those doing business with the government, to gain insight into the government's activities. Companies facing a request or subpoena for information or testimony from a congressional committee should promptly consult counsel for assistance.

With an all-Republican Congress, we think it highly likely that HOGR will revise and extend past congressional investigations of Hillary Clinton's email scandal and the operations of the Clinton Global Initiative/Clinton Foundation.

Senate. The structure, role, and size of the Senate make it less subject to popular passions and high drama, but congressional oversight in the Senate can be just as fierce as in the House. Given the temperament of the leaders of the full HSGAC committee, and the anticipated need to address legislative matters within its jurisdiction, we believe much of the investigative work will fall to PSI. Sen. Portman's position at the helm of PSI, with its sweeping investigative authority and powers, could provide a platform for high-profile clashes with the President-elect's administration. It is also possible that Sen. McCaskill may be able to persuade Sen. Portman to join her in examining the pharmaceutical market, despite their different views of the causal factors for high drug prices.

Other Senate Committees. As is the case with the House, we expect other committees in the Senate—many with seasoned congressional investigative staff—to be active in congressional inquiries and hearings on matters under their jurisdiction. Among the most likely to remain active is the Special Committee on Aging, a non-legislative committee focused on policy and oversight relating to older Americans. It is also worth mentioning that some Senators, with or without gavels or the ability to hold hearings, have skilled professional oversight staff, either in their personal offices or through committee positions. For example, Sen. Elizabeth Warren (D-MA) has professional investigative staff, and has partnered with other senators to investigate various matters. Although they are in the minority, should Democratic senators' investigations of President-elect Trump's administration encounter resistance, we may see holds on President-elect Trump's nominees until their requests are satisfied.

Our full analysis of the 2016 election is available below.

Post-Election Analysis 2016

(Downloadable PDF)

Subscribe Link

Email Disclaimer