Five Steps to Take to Avoid Getting Yourself in (more) Trouble With Congress

    8 April 2013

    Receiving a subpoena or a document request from a Congressional committee is a frightening event. Congressional investigations are almost always contentious, political, and usually play out in the most public of forums. The reputational risk to a company is therefore often greater than in any other kind of government investigation. Below I list five basic steps for minimizing the damage:

    1. Know your problem

      At the first sign of trouble (hopefully before you receive a subpoena), start an internal investigation. Know the extent of the problem before Congress (or some other government investigator) comes calling. If you already understand the extent of your problem, you will know how to react when Congress starts to ask questions, and you will be better able to impress upon the investigators that you have a handle on the situation. Congress will be less inclined to haul you in for a public hearing if you have a handle on the problem. Regulators (Congress included) want to know that you are aware of the problem within their area of responsibility, and that you are proactively dealing with it.
    2. Know your Members

      When dealing with a Congressional committee, it is crucial to know where the Members of the committee stand on the issue in question, and how it affects their district and their constituency. It is also crucial to know where the Chairman and relevant Subcommittee Chairmen stand on the issue, as well as the positions of the Majority and Minority parties on the committee. Only by engaging counsel who know the Members can you make sure that you are covering your bases.
    3. Know your Committee staff

      Members of Congress are important. When it comes to Congressional investigations, Committee staff may be even more important. All official Congressional investigations are run by the powerful Committees, not by individual Members of Congress. The Committees have the trained staff, the experienced investigators and, most importantly, the power to issue subpoenas. Individual members of Congress do not. The Committee staff run the investigations on a day-to-day basis, interview the witnesses, review the documents, and advise the Members of Congress as to how to conduct the investigation – whether to conduct hearings, who to call as witnesses to the hearings, etc. Knowing the Committee staff and making sure that you have a good working relationship with the Committee staff is crucial to your ability to withstand a Congressional investigation and to minimize your financial and reputational risk. Engaging outside counsel with a good working relationship with the Committee staff is a crucial step.
    4. Watch your back for parallel investigations

      Congressional committees are hardly ever the sole investigating body. If an issue is prominent enough to garner the attention of a Congressional committee, it will almost certainly involve parallel investigations by: a) the relevant federal regulatory agency (whether it be the Federal Trade Commission (FTC), the Commodities Future Trading Commission (CFTC), the Securities and Exchange Commission (SEC), the Food and Drug Administration (FDA), or any number of other federal agencies with subpoena power); b) the Inspectors General for each of those federal regulatory agencies; and/or c) the Department of Justice (DOJ). It is crucial to engage outside counsel or a law firm that has extensive experience with each of these types of investigating bodies.
    5. Have a media/public relation strategy in place

      Congress doesn’t do anything quietly. If Congress is investigating an issue, that issue is going to be in the national media. A company needs to have a plan for dealing with negative media scrutiny. This is often a hard task. When a company is under investigation, the company may be very limited in what it can say publicly. In addition, the company must be careful to avoid making statements which might anger the Members of the Committee or the Committee staff. Again, it is crucial to engage counsel that has experience on Capitol Hill, and knows how to coordinate a public media strategy with the legal response to a Congressional investigation.