"Congressional Investigations Highlight Risks for Companies Across Industries"

by Skadden, Arps, Slate, Meagher & Flom LLP

An examination of congressional investigations in 2014 reminds us that such investigations can strike an industry or company at any time. Irrespective of the subjects, the investigations typically share one or more of the following:

  • Congress has the potential to employ an arsenal of investigative tools — including the creation of Select Committees — to ensure effective oversight;
  • Congressional investigations are broad in scope, and there are implications for all involved, not just the targets of the investigation;
  • Failing to disclose requested information, responding in an inaccurate or inconsistent manner, or failing to cooperate in an investigation can have serious ramifications, including being held in contempt of Congress;
  • Congress uses investigations to achieve different ends — industry reform, legislation, shining a spotlight on bad actors, or encouraging involvement by regulators and law enforcement;
  • Congressional investigations can span a significant period of time, especially when the issues are bipartisan;
  • Congress initiates investigations into matters that often are subjects of parallel proceedings or eventually lead to subsequent government investigations or litigation; and
  • Congress views its jurisdiction as limitless.

Government-Focused Investigations

Historically, second-term presidents and their administrations have faced high-profile congressional investigations — Richard Nixon and Watergate, Ronald Reagan and Iran-Contra, Bill Clinton and Monica Lewinsky, and George W. Bush and the outing of an undercover CIA agent. President Obama and his administration are no exception, encountering a large number of significant investigations focused on various federal agencies, policies and programs put into place by the administration. Nevertheless, these investigations provide useful lessons for the private sector. Examples of these investigations include the following:


The September 11, 2012, attack by militants who stormed the American diplomatic compound in Benghazi, Libya, and, hours later, a CIA compound nearby, which resulted in the death of the U.S. ambassador to Libya and three other Americans, prompted numerous congressional investigations into both the attack and the Obama administration’s response. In 2014 alone, four separate House of Representatives committees continued investigations into Benghazi: the committees on Armed Services, Foreign Affairs, and Oversight and Government Reform, and the House Permanent Select Committee on Intelligence.

Despite these numerous ongoing investigations, on May 8, 2014, the House established the Select Committee on the Events Surrounding the 2012 Terrorist Attack in Benghazi, Libya, to investigate what happened and learn from potentially avoidable mistakes.1 The Select Committee's investigation will continue its study of the events surrounding the Benghazi attack and ultimately issue a final report of its findings to the House.


The moment the Patient Protection and Affordable Care Act (Obamacare) became law on March 23, 2010, Republicans were ramped up to conduct congressional investigations. Perhaps most prominently, the House Committee on Government Oversight has held a number of hearings on Obamacare. Although these hearings generally focused on the Obama administration, private entities also became entangled in the investigation. For example, the committee subpoenaed records from MITRE Corporation, a federal contractor overseeing security for the HealthCare.gov website, and a company executive later testified at a January 2014 hearing regarding possible security vulnerabilities on the site. Similarly, in February 2014, the committee held a hearing on payments to private insurers under Obamacare's reinsurance and risk corridor programs. While the Republican Party undoubtedly would like to repeal Obamacare in 2015, they know President Obama will veto such efforts and, therefore, are likely to attack the legislation piece by piece. For example, House Republicans have already passed a bill that would change the definition of full-time work from 30 to 40 hours a week, reducing the number of employers that have to offer health insurance.

Investigation of the Internal Revenue Service (IRS)

Congressional committees also initiated investigations into the IRS’s practice of targeting certain political groups applying for tax-exempt status for additional scrutiny based on perceived affiliations with conservative groups. Of those committees, the House Committee on Government Oversight was the most aggressive, hearing the testimony of former IRS Director of Exempt Organizations Lois Lerner, among several others. In May 2013, Lerner provided an opening statement and then invoked her Fifth Amendment right against self-incrimination. She again invoked her Fifth Amendment right on March 5, 2014, when summoned for additional questioning. On May 7, 2014, the House adopted H. Res. 574, finding Lerner in contempt of Congress for her refusal to comply with the committee’s subpoena and answer its questions. On December 23, 2014, the House Committee on Government Oversight issued a staff report — its sixth on this subject — indicating that the committee is continuing to gather information and that its investigation of IRS targeting will continue in 2015.

The Veteran Affairs (VA) Scandal

In August 2014, the VA Office of the Inspector General issued its final report on the Phoenix VA health care system. The report deemed inappropriate scheduling practices that adversely affected the quality of care for veterans at the Phoenix VA medical center to be a nationwide systemic problem, prompting both the Senate Veterans Affairs Committee and the House Committee on Veteran Affairs to hold hearings addressing the report. In response to such public and congressional scrutiny, in November, the VA reported that over 100 investigations of VA facilities had been conducted by the VA Office of the Inspector General, the FBI, the U.S. Department of Justice (DOJ) and others. The VA noted that “disciplinary action,” including firings, had been taken against 5,600 employees in the past year with more anticipated firings in the future. It also said that reforms are under way, including the establishment of a VA-wide customer service office, new partnerships with private organizations, and reorganizations to improve and simplify the VA’s structure.

Private Sector-Focused Investigations

There also were a number of investigations in 2014 that focused exclusively on the private sector. Examples of these investigations include the following: Data Breach

In 2014, the wave of high-profile data breaches continued, with several corporations announcing major cybersecurity attacks resulting in the release of massive amounts of consumer data, including credit, debit card and other sensitive personal information. Congressional committees including the Senate Judiciary Committee; the Senate Banking Subcommittee on National Security and International Trade and Finance; and the House Energy and Commerce Subcommittee on Commerce, Manufacturing and Trade have held hearings, which have focused on Target and Home Depot, among other companies. In addition, individual members of Congress have made data breach-related inquiries of numerous major financial institutions. Moreover, in December of 2014 Sen. Mark Kirk called on Congress to hold hearings on the destructive cyberattack that forced Sony Pictures to cancel the theatrical release of its controversial comedy “The Interview.” A number of legislative proposals also have been introduced to address the lack of standards in data protection. (See "Insights Conversations: Cybersecurity.")

Overseas Tax Issues

The Senate Permanent Subcommittee on Investigations (PSI) has been conducting an ongoing investigation dating back to the early 2000s of how U.S. multinational corporations have used U.S. tax statutes, regulations and accounting rules to shift profits and valuable assets offshore to avoid U.S. taxes. Previous PSI investigations examined offshore tax avoidance by Apple, Microsoft and Hewlett-Packard, among others. In 2014, PSI focused on Caterpillar, a major U.S. manufacturer of construction equipment, power generators and sophisticated engines, to illustrate the structure and methods employed by multinational corporations to allocate income outside the United States. Moving forward in 2015, although Democrats want to close the loopholes for corporations, Republicans will oppose such efforts and likely focus any hearings on tax reform and issues with the Tax Code.

Wireless Cramming

As a result of investigations by the Senate Commerce Committee into “cramming” on landline (2010-11) and wireless phone bills (2012) — unauthorized billing for products and services that consumers claim they did not authorize — in 2014, the Federal Trade Commission (FTC) and state attorneys general initiated derivative investigations and related litigation. For example, the FTC initiated a law enforcement action against T-Mobile, and the FTC and attorneys general of all 50 states reached a $105 million settlement with AT&T. Further, on December 17, 2014, the Consumer Financial Protection Bureau (CFPB) filed a lawsuit against Sprint in the Southern District of New York related to alleged cramming on wireless phone bills. Sprint’s answer to the CFPB’s complaint is due February 20, 2015. This case will be followed closely as a test to CFPB’s jurisdictional reach over telecom carriers.

General Motors (GM) Ignition Switch Recall

In 2014, GM was the subject of numerous inquiries, investigations, subpoenas and requests for information from the National Highway Traffic Safety Administration (NHTSA), U.S. Attorney’s Office for the Southern District of New York, Securities and Exchange Commission (SEC) and DOJ in connection with GM’s handling of the ignition switch issue that was linked to 31 frontal crashes and 13 deaths. Despite the concurrent investigations by numerous federal agencies, the House and Senate quickly launched their own parallel investigations and held hearings on the recall. GM has agreed to three years of monitoring by the NHTSA. Investigations by the DOJ, attorneys general and the SEC are ongoing, and there may be more congressional hearings in 2015 with a focus beyond GM.

Domestic Violence and Its Treatment by Professional Sports Leagues

In February 2014, Baltimore Ravens running back Ray Rice was arrested and charged with aggravated assault after an incident of domestic violence involving his fiancée (now wife) came to light. Concerned with the way the National Football League handled this issue and viewing its jurisdiction as limitless, 12 House of Representatives Judiciary Committee Democrats sent a letter to NFL Commissioner Roger Goodell demanding "the highest level of transparency" regarding how the league investigated the incident. In December 2014, the Senate Commerce Committee held a hearing to address domestic violence in professional sports. Then-Chairman Jay Rockefeller and new Chairman John Thune called on sports leagues to implement uniform policies to punish players who commit violent acts. Thune further stated that the committee might revisit this issue in 2015 “to assess the progress of the leagues and the players associations in dealing with domestic violence.”


For businesses that find themselves involved in a congressional investigation, understanding the rules (or lack thereof) and minimizing reputational harm and the collateral impact of the investigation should be the highest priorities. As illustrated by the above examples, an entity has no control over when a congressional investigation may strike, and little to no ability to stop it. Employing transparency strategically, maintaining a high level of credibility and working cooperatively with committee staff during the course of a congressional investigation help mitigate the reputational harm caused and better position a company for collateral issues such as derivative investigations or litigation.

1 Congress has previously created select committees to investigate major events or disasters, such as, for example, the bombing of Pearl Harbor, the Watergate break-in, the Iran-Contra Affair and the preparation for and response to Hurricane Katrina.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Skadden, Arps, Slate, Meagher & Flom LLP | Attorney Advertising

Written by:

Skadden, Arps, Slate, Meagher & Flom LLP

Skadden, Arps, Slate, Meagher & Flom LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide

JD Supra Privacy Policy

Updated: May 25, 2018:

JD Supra is a legal publishing service that connects experts and their content with broader audiences of professionals, journalists and associations.

This Privacy Policy describes how JD Supra, LLC ("JD Supra" or "we," "us," or "our") collects, uses and shares personal data collected from visitors to our website (located at www.jdsupra.com) (our "Website") who view only publicly-available content as well as subscribers to our services (such as our email digests or author tools)(our "Services"). By using our Website and registering for one of our Services, you are agreeing to the terms of this Privacy Policy.

Please note that if you subscribe to one of our Services, you can make choices about how we collect, use and share your information through our Privacy Center under the "My Account" dashboard (available if you are logged into your JD Supra account).

Collection of Information

Registration Information. When you register with JD Supra for our Website and Services, either as an author or as a subscriber, you will be asked to provide identifying information to create your JD Supra account ("Registration Data"), such as your:

  • Email
  • First Name
  • Last Name
  • Company Name
  • Company Industry
  • Title
  • Country

Other Information: We also collect other information you may voluntarily provide. This may include content you provide for publication. We may also receive your communications with others through our Website and Services (such as contacting an author through our Website) or communications directly with us (such as through email, feedback or other forms or social media). If you are a subscribed user, we will also collect your user preferences, such as the types of articles you would like to read.

Information from third parties (such as, from your employer or LinkedIn): We may also receive information about you from third party sources. For example, your employer may provide your information to us, such as in connection with an article submitted by your employer for publication. If you choose to use LinkedIn to subscribe to our Website and Services, we also collect information related to your LinkedIn account and profile.

Your interactions with our Website and Services: As is true of most websites, we gather certain information automatically. This information includes IP addresses, browser type, Internet service provider (ISP), referring/exit pages, operating system, date/time stamp and clickstream data. We use this information to analyze trends, to administer the Website and our Services, to improve the content and performance of our Website and Services, and to track users' movements around the site. We may also link this automatically-collected data to personal information, for example, to inform authors about who has read their articles. Some of this data is collected through information sent by your web browser. We also use cookies and other tracking technologies to collect this information. To learn more about cookies and other tracking technologies that JD Supra may use on our Website and Services please see our "Cookies Guide" page.

How do we use this information?

We use the information and data we collect principally in order to provide our Website and Services. More specifically, we may use your personal information to:

  • Operate our Website and Services and publish content;
  • Distribute content to you in accordance with your preferences as well as to provide other notifications to you (for example, updates about our policies and terms);
  • Measure readership and usage of the Website and Services;
  • Communicate with you regarding your questions and requests;
  • Authenticate users and to provide for the safety and security of our Website and Services;
  • Conduct research and similar activities to improve our Website and Services; and
  • Comply with our legal and regulatory responsibilities and to enforce our rights.

How is your information shared?

  • Content and other public information (such as an author profile) is shared on our Website and Services, including via email digests and social media feeds, and is accessible to the general public.
  • If you choose to use our Website and Services to communicate directly with a company or individual, such communication may be shared accordingly.
  • Readership information is provided to publishing law firms and authors of content to give them insight into their readership and to help them to improve their content.
  • Our Website may offer you the opportunity to share information through our Website, such as through Facebook's "Like" or Twitter's "Tweet" button. We offer this functionality to help generate interest in our Website and content and to permit you to recommend content to your contacts. You should be aware that sharing through such functionality may result in information being collected by the applicable social media network and possibly being made publicly available (for example, through a search engine). Any such information collection would be subject to such third party social media network's privacy policy.
  • Your information may also be shared to parties who support our business, such as professional advisors as well as web-hosting providers, analytics providers and other information technology providers.
  • Any court, governmental authority, law enforcement agency or other third party where we believe disclosure is necessary to comply with a legal or regulatory obligation, or otherwise to protect our rights, the rights of any third party or individuals' personal safety, or to detect, prevent, or otherwise address fraud, security or safety issues.
  • To our affiliated entities and in connection with the sale, assignment or other transfer of our company or our business.

How We Protect Your Information

JD Supra takes reasonable and appropriate precautions to insure that user information is protected from loss, misuse and unauthorized access, disclosure, alteration and destruction. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. You should keep in mind that no Internet transmission is ever 100% secure or error-free. Where you use log-in credentials (usernames, passwords) on our Website, please remember that it is your responsibility to safeguard them. If you believe that your log-in credentials have been compromised, please contact us at privacy@jdsupra.com.

Children's Information

Our Website and Services are not directed at children under the age of 16 and we do not knowingly collect personal information from children under the age of 16 through our Website and/or Services. If you have reason to believe that a child under the age of 16 has provided personal information to us, please contact us, and we will endeavor to delete that information from our databases.

Links to Other Websites

Our Website and Services may contain links to other websites. The operators of such other websites may collect information about you, including through cookies or other technologies. If you are using our Website or Services and click a link to another site, you will leave our Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We are not responsible for the data collection and use practices of such other sites. This Policy applies solely to the information collected in connection with your use of our Website and Services and does not apply to any practices conducted offline or in connection with any other websites.

Information for EU and Swiss Residents

JD Supra's principal place of business is in the United States. By subscribing to our website, you expressly consent to your information being processed in the United States.

  • Our Legal Basis for Processing: Generally, we rely on our legitimate interests in order to process your personal information. For example, we rely on this legal ground if we use your personal information to manage your Registration Data and administer our relationship with you; to deliver our Website and Services; understand and improve our Website and Services; report reader analytics to our authors; to personalize your experience on our Website and Services; and where necessary to protect or defend our or another's rights or property, or to detect, prevent, or otherwise address fraud, security, safety or privacy issues. Please see Article 6(1)(f) of the E.U. General Data Protection Regulation ("GDPR") In addition, there may be other situations where other grounds for processing may exist, such as where processing is a result of legal requirements (GDPR Article 6(1)(c)) or for reasons of public interest (GDPR Article 6(1)(e)). Please see the "Your Rights" section of this Privacy Policy immediately below for more information about how you may request that we limit or refrain from processing your personal information.
  • Your Rights
    • Right of Access/Portability: You can ask to review details about the information we hold about you and how that information has been used and disclosed. Note that we may request to verify your identification before fulfilling your request. You can also request that your personal information is provided to you in a commonly used electronic format so that you can share it with other organizations.
    • Right to Correct Information: You may ask that we make corrections to any information we hold, if you believe such correction to be necessary.
    • Right to Restrict Our Processing or Erasure of Information: You also have the right in certain circumstances to ask us to restrict processing of your personal information or to erase your personal information. Where you have consented to our use of your personal information, you can withdraw your consent at any time.

You can make a request to exercise any of these rights by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

You can also manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard.

We will make all practical efforts to respect your wishes. There may be times, however, where we are not able to fulfill your request, for example, if applicable law prohibits our compliance. Please note that JD Supra does not use "automatic decision making" or "profiling" as those terms are defined in the GDPR.

  • Timeframe for retaining your personal information: We will retain your personal information in a form that identifies you only for as long as it serves the purpose(s) for which it was initially collected as stated in this Privacy Policy, or subsequently authorized. We may continue processing your personal information for longer periods, but only for the time and to the extent such processing reasonably serves the purposes of archiving in the public interest, journalism, literature and art, scientific or historical research and statistical analysis, and subject to the protection of this Privacy Policy. For example, if you are an author, your personal information may continue to be published in connection with your article indefinitely. When we have no ongoing legitimate business need to process your personal information, we will either delete or anonymize it, or, if this is not possible (for example, because your personal information has been stored in backup archives), then we will securely store your personal information and isolate it from any further processing until deletion is possible.
  • Onward Transfer to Third Parties: As noted in the "How We Share Your Data" Section above, JD Supra may share your information with third parties. When JD Supra discloses your personal information to third parties, we have ensured that such third parties have either certified under the EU-U.S. or Swiss Privacy Shield Framework and will process all personal data received from EU member states/Switzerland in reliance on the applicable Privacy Shield Framework or that they have been subjected to strict contractual provisions in their contract with us to guarantee an adequate level of data protection for your data.

California Privacy Rights

Pursuant to Section 1798.83 of the California Civil Code, our customers who are California residents have the right to request certain information regarding our disclosure of personal information to third parties for their direct marketing purposes.

You can make a request for this information by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

Some browsers have incorporated a Do Not Track (DNT) feature. These features, when turned on, send a signal that you prefer that the website you are visiting not collect and use data regarding your online searching and browsing activities. As there is not yet a common understanding on how to interpret the DNT signal, we currently do not respond to DNT signals on our site.

Access/Correct/Update/Delete Personal Information

For non-EU/Swiss residents, if you would like to know what personal information we have about you, you can send an e-mail to privacy@jdsupra.com. We will be in contact with you (by mail or otherwise) to verify your identity and provide you the information you request. We will respond within 30 days to your request for access to your personal information. In some cases, we may not be able to remove your personal information, in which case we will let you know if we are unable to do so and why. If you would like to correct or update your personal information, you can manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard. If you would like to delete your account or remove your information from our Website and Services, send an e-mail to privacy@jdsupra.com.

Changes in Our Privacy Policy

We reserve the right to change this Privacy Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our Privacy Policy will become effective upon posting of the revised policy on the Website. By continuing to use our Website and Services following such changes, you will be deemed to have agreed to such changes.

Contacting JD Supra

If you have any questions about this Privacy Policy, the practices of this site, your dealings with our Website or Services, or if you would like to change any of the information you have provided to us, please contact us at: privacy@jdsupra.com.

JD Supra Cookie Guide

As with many websites, JD Supra's website (located at www.jdsupra.com) (our "Website") and our services (such as our email article digests)(our "Services") use a standard technology called a "cookie" and other similar technologies (such as, pixels and web beacons), which are small data files that are transferred to your computer when you use our Website and Services. These technologies automatically identify your browser whenever you interact with our Website and Services.

How We Use Cookies and Other Tracking Technologies

We use cookies and other tracking technologies to:

  1. Improve the user experience on our Website and Services;
  2. Store the authorization token that users receive when they login to the private areas of our Website. This token is specific to a user's login session and requires a valid username and password to obtain. It is required to access the user's profile information, subscriptions, and analytics;
  3. Track anonymous site usage; and
  4. Permit connectivity with social media networks to permit content sharing.

There are different types of cookies and other technologies used our Website, notably:

  • "Session cookies" - These cookies only last as long as your online session, and disappear from your computer or device when you close your browser (like Internet Explorer, Google Chrome or Safari).
  • "Persistent cookies" - These cookies stay on your computer or device after your browser has been closed and last for a time specified in the cookie. We use persistent cookies when we need to know who you are for more than one browsing session. For example, we use them to remember your preferences for the next time you visit.
  • "Web Beacons/Pixels" - Some of our web pages and emails may also contain small electronic images known as web beacons, clear GIFs or single-pixel GIFs. These images are placed on a web page or email and typically work in conjunction with cookies to collect data. We use these images to identify our users and user behavior, such as counting the number of users who have visited a web page or acted upon one of our email digests.

JD Supra Cookies. We place our own cookies on your computer to track certain information about you while you are using our Website and Services. For example, we place a session cookie on your computer each time you visit our Website. We use these cookies to allow you to log-in to your subscriber account. In addition, through these cookies we are able to collect information about how you use the Website, including what browser you may be using, your IP address, and the URL address you came from upon visiting our Website and the URL you next visit (even if those URLs are not on our Website). We also utilize email web beacons to monitor whether our emails are being delivered and read. We also use these tools to help deliver reader analytics to our authors to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

Analytics/Performance Cookies. JD Supra also uses the following analytic tools to help us analyze the performance of our Website and Services as well as how visitors use our Website and Services:

  • HubSpot - For more information about HubSpot cookies, please visit legal.hubspot.com/privacy-policy.
  • New Relic - For more information on New Relic cookies, please visit www.newrelic.com/privacy.
  • Google Analytics - For more information on Google Analytics cookies, visit www.google.com/policies. To opt-out of being tracked by Google Analytics across all websites visit http://tools.google.com/dlpage/gaoptout. This will allow you to download and install a Google Analytics cookie-free web browser.

Facebook, Twitter and other Social Network Cookies. Our content pages allow you to share content appearing on our Website and Services to your social media accounts through the "Like," "Tweet," or similar buttons displayed on such pages. To accomplish this Service, we embed code that such third party social networks provide and that we do not control. These buttons know that you are logged in to your social network account and therefore such social networks could also know that you are viewing the JD Supra Website.

Controlling and Deleting Cookies

If you would like to change how a browser uses cookies, including blocking or deleting cookies from the JD Supra Website and Services you can do so by changing the settings in your web browser. To control cookies, most browsers allow you to either accept or reject all cookies, only accept certain types of cookies, or prompt you every time a site wishes to save a cookie. It's also easy to delete cookies that are already saved on your device by a browser.

The processes for controlling and deleting cookies vary depending on which browser you use. To find out how to do so with a particular browser, you can use your browser's "Help" function or alternatively, you can visit http://www.aboutcookies.org which explains, step-by-step, how to control and delete cookies in most browsers.

Updates to This Policy

We may update this cookie policy and our Privacy Policy from time-to-time, particularly as technology changes. You can always check this page for the latest version. We may also notify you of changes to our privacy policy by email.

Contacting JD Supra

If you have any questions about how we use cookies and other tracking technologies, please contact us at: privacy@jdsupra.com.

- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.