Oversight and Investigations Informer – March 28, 2022

What We Are Watching:

NGO’S UTILITY REPORT SPURS DEMOCRATIC PROBE: Democrats on the House Energy and Commerce Committee are leaning on a report published by an environmental NGO to justify their investigation into utilities shutting off customers service during the COVID-19 pandemic. The Center for Biological Diversity report, published last fall, accused utilities of taking federal funding tied to the Coronavirus Aid, Relief, and Economic Security (CARES) Act, though a spokesperson for the Edison Electric Institute said the utilities didn’t get direct payments from the CARES Act.

HOUSE OVERSIGHT INVESTIGATES USPS FLEET CONTRACTOR: The U.S. Postal Service’s plan to replace its fleet with primarily non-electric vehicles – opposed by the White House – has prompted Democrats on the House Oversight Committee to investigate the vehicle manufacturer. The probe is said to focus on whether the company plans to use unionized labor to build the vehicles and is prepared to deliver electric vehicles in an efficient and cost-effective manner at the new facility.

SEC DRAMATICALLY EXPANDS CLIMATE DISCLOSURE REQUIREMENTS: The SEC’s new climate disclosure rule was released last week with the expected blowback from Republicans who argue it oversteps the agency’s authority and Democrats who believe it doesn’t go far enough. FTI’s ESG & Sustainability experts have more on this topic in a thought leadership piece on the importance of publicly traded companies having climate strategies in place.

Week Ahead:  

• The Senate Energy and Natural Resources Committee will hold a hearing on domestic critical mineral supply chains on Thursday, March 31.

Key Insights:

FERC WALKS BACK PIPELINE CLIMATE POLICY: In the face of fairly routine pushback from the natural gas industry and politicians, FERC made a surprise decision last week to walk back its new policy that would have considered the climate and environmental justice impacts of new pipeline infrastructure, and approved three new pipelines to boot. Senate Republican Leader Mitch McConnell (R-KY) said in a letter just hours before FERCs announcement that at “a time when we should be looking for ways to expedite the approval of these important projects, the (energy) commission has chosen on a purely partisan basis to do the exact opposite.” The policy is now open to public comment. The decision prior to President Biden’s announcement of the international agreement for the U.S. to supply the European Union with LNG to help ween it off Russian energy exports; one of the pipelines approved last week will connect to an LNG export terminal in Louisiana.

What We Are Watching:

SEC NOMINEES:  As the Federal Reserve Board nomination process comes to an end, the White House is now focused on nominating candidates for the vacant Securities and Exchange Commission (SEC) commissioner positions. There are currently two vacancies with the resignation of Republican Elad Roisman in January, and Democratic Allison Lee retirement at the end of her term in June. Jamie Lizárraga, a veteran staffer of Speaker of the House Nancy Pelosi, Elisha Tuku, a U.S. Senate Banking, Housing and Urban Affairs staffer, and Federal Reserve lawyer Uzma Wahhab are all candidates for the Democrat opening. An anonymous source said Lizárraga is the leading contender for the Democratic opening and has the support of the Congressional Hispanic Caucus.

Week Ahead:  

The House Committee on Financial Services will convene four hearings this week:

• A hybrid Full Committee hearing entitled, “Devalued, Denied, and Disrespected: How Home Appraisal Bias and Discrimination Are Hurting Homeowners and Communities of Color,”on Tuesday, March 29.
• A hybrid Task Force on Artificial Intelligence hearing entitled, “Keeping Up with the Codes – Using AI for Effective RegTech,” on Wednesday, March 30.
• A hybrid Subcommittee on Investor Protection, Entrepreneurship and Capital Markets hearing entitled, “Oversight of America’s Stock Exchanges: Examining Their Role in Our Economy,” on Wednesday, March 30.
• A hybrid Subcommittee on Consumer Protection and Financial Institutions hearing entitled, “The End of Overdraft Fees? Examining the Movement to Eliminate the Fees Costing Consumers Billions,” on Thursday, March 31.

The Senate Committee on Banking, Housing, and Urban Affairs will convene one hearing this week:

• A live Full Committee hearing entitled, “Economic Impact of the Growing Burden of Medical Debt,” on Tuesday, March 29.

Key Insights:  

Senators Cynthia Lummis (R-WY) and Kirstin Gillibrand (D-NY) announced their collaboration on bipartisan legislation to provide regulatory clarity for the crypto industry. To create the comprehensive framework, the Senators are reviewing different aspects of the industry, such as consumer protection and market certainty. The bill would require the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) to share regulatory control over the crypto ecosystem. The two agencies have been fighting to take ownership of the space, and the legislation will clarify that both agencies have jurisdiction. The Senators plan to introduce their legislation in the coming weeks.

What We Are Watching:

CONGRESS PROBES FDA HANDLING OF PROBLEMATIC HEART DEVICE: On Tuesday, March 22, House Oversight and Reform Subcommittee on Economic and Consumer Policy Chairman Raja Krishnamoorthi (D-IL-8) sent a letter to the Food Drug Administration (FDA) Commissioner Robert Califf requesting information regarding the regulatory decisions related to a high-risk heart pump device that stopped meeting key federal standards in 2014, citing safety issues. The HeartWare Ventricular Assist Device (HVAD) System has been the center of controversy as it faced reports of thousands of patient injuries and deaths. The FDA did not investigate safety issues with the device despite early warning signs prior to the device’s recall in June 2021. The FDA has until April 5 to respond to the Subcommittee Chairman’s request.

PALLONE QUESTIONS VAPING COMPANIES’ ROLES IN THE RISE OF YOUTH VAPING: On Monday, March 21, House Energy & Commerce Committee Chairman Frank Pallone (D-NJ-6) sent letters to four companies that sell synthetic nicotine products. The letters requested information on the health and safety of the nicotine products. Chairman Pallone requested the companies share their plans to comply with federal regulations of nicotine products and provide details of their marketing campaigns.  Chairman Pallone suggested the companies appeared to target their marketing to young people. The letters follow the enactment of legislation that provides the FDA greater authority in its regulation of synthetic nicotine.

WAYS AND MEANS CHAIRMAN REQUESTS INFORMATION ON HEALTH CARE INDUSTRY’S IMPACT ON THE CLIMATE CRISIS: On Monday, March 21 House Ways and Means Committee Chairman Richard Neal (D-MA-1) issued a Request for Information (RFI) from 12 healthcare organizations, including Boston Medical Center, Kaiser Permanente, Gundersen Health System, Mayo Clinic, among others. The Committee request details of the healthcare organizations’ work to combat the climate crisis. The letter requests submission of the information no later than Thursday, April 14.

Week Ahead:

• The House Oversight and Reform Committee will hold a hearing entitled, “Examining Pathways to Universal Health Coverage,” on Tuesday, March 29.
• The Senate Appropriations Subcommittee on Defense will hold a hearing entitled “Defense Health Program.” Witnesses will include Dr. David J. Smith, Performing the Duties of Assistant Secretary of Defense for Health Affairs; LTG. Ronald J. Place, Director of the Defense Health Agency; LTG. R. Scott Dingle, Surgeon General of the Army; Lt. Gen. Robert I. Miller, Surgeon General of the Air Force; and Rear Adm. Bruce L. Gillingham, Surgeon General of the Navy on Tuesday, March 29.
• The House Energy & Commerce Committee will hold a hearing entitled “FDA User Fee Reauthorization: Ensuring Safe And Effective Medical Devices.” The list of witnesses invited to appear before the Committee has not been released on Wednesday, March 30.
• The House Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies will hold a hearing on the FY 2023 Budget Request for the U.S. Department of Health and Human Services (HHS). The Secretary of HHS, Xavier Becerra, will serve as a witness on Thursday, March 31.

Key Insights:  

On Thursday, March 24, Senators Jacky Rosen (D-NV) and Bill Cassidy (R-LA) introduced the Healthcare Cybersecurity Act, a bill that would order the Cybersecurity and Infrastructure Security Agency (CISA) to partner with the U.S. Department of Health and Human Services (HHS) to boost cybersecurity in the health care sector. The legislation also would support cybersecurity training for industry players and require CISA to conduct a study on cybersecurity risks to the health care sector. This is in response to the rise in healthcare data breaches and the looming potential threat of a Russian cyberattacks. Nearly 50 million Americans experienced a health data breach in 2021 alone.

What We Are Watching:

BIDEN ADMINSTRATION APPOINTS ACTING FAA ADMINISTRATOR: Billy Nolen, who has served as the FAA’s Associate Administrator for Aviation Safety since January, has been appointed the acting FAA head, replacing Trump appointee Steve Dickson who retired. Before joining the FAA, Nolen served as Vice President for safety, security and quality for WestJet Airlines in Canada.

BIPARTISAN HOUSE GROUP ANNOUNCES BILL TO COMBAT PFAS POLLUTION: E&E News reports that a bipartisan group of House lawmakers led by Representative Haley Stevens (D-MI) announced a new bill that would direct the EPA to designate PFAS chemicals as hazardous air pollutants. The bill, “Prevent Release of Toxic Emissions, Contamination and Transfer (PROTECT) Act,” would add PFAS chemicals to the EPA’s list of pollutants included under section 112(b) of the Clean Air Act.

Week Ahead:

• The House Energy and Commerce Committee will hold a hearing titled Trusting the Tap: Upgrading America’s Drinking Water Infrastructure on Tuesday, March 29.

What We Are Watching:

HEALTH TECH STARTUPS UNDER FIRE: Former employees say health startups Cerebral and Done capitalized on a rule relaxed by the federal government during the pandemic that would otherwise require an in-person visit before such substances can be provided to prescribe stimulants, often via 30-minute online evaluations. Employees say they felt pressured by the structure of the health tech startups to virtually prescribe too quickly, or without significant confidence of the diagnosis.

BIDEN BUMPS ANTITRUST BUDGET: In his 2023 budget requests, President Biden requested significant bumps for both the budgets for the U.S. Department of Justice (DOJ) and Federal Trade Commission (FTC), requesting an $88 million increase for the antitrust division above the 2021 budget, bringing the total to $287 million, and an additional $139 million for the FTC, bringing the total for the agency to $491 million.

Week Ahead:

• The Federal Communications Commission (FCC) holds a virtual meeting of the Communications Security, Reliability, and Interoperability Council on March 30.
• The House Energy and Commerce Communications and Technology Subcommittee holds a hearing on “Connecting America: Oversight of the FCC” on March 31.

Key Insights:

Amid the ongoing war on Ukraine, social media platforms have had to rewrite policies on hate, violence, and propaganda, setting precedents through ad hoc actions that deviate significantly from longstanding platform rules. In recent weeks, Google has blocked adds and taken down YouTube videos that attempt to trivialize war, Twitter has stopped recommending Russian state media tweets, and TikTok has suspended video uploads from Russia. The decisions by most of the largest tech platforms underscores the complexities companies face when considering content moderations and platform governance, and how geopolitical conflicts only further complicate these rulebooks.