Oversight & Investigations Informer – 4.26.21
NOTABLE DEVELOPMENTS
What We Are Watching:
HOUSE REPUBLICAN POLICY RETREAT: The House Republican Conference is in Orlando, Florida for its annual three day policy retreat to discuss legislative priorities for the coming year. Speakers include Miami Mayor Francis Suarez, former press secretary Sarah Huckabee Sanders, and RNC Chair Ronna McDaniel.
TIM RYAN TO RUN FOR OHIO SENATE: Rep. Tim Ryan (D-OH) became the first Democrat to announce his candidacy for the Senate seat vacated by Senator Rob Portman’s retirement in 2022. Ryan has served in the House since 2003, and currently represents Ohio’s 13th Congressional district (Youngstown.) He is closely allied to labor unions and said in his announcement; “I am running to fight like hell in the US Senate to cut workers in on the deal.”
U.S. TO SHARE COVID VACCINE DOSES: The Biden administration announced on Monday that it will share up to 60 million doses of the AstraZeneca vaccine with other countries. The New York Times reported that the announcement came after President Biden spoke with Prime Minister Narendra Modi of India, whose country has been suffering from a surge in infections.
Week Ahead:
President Biden will address a joint session of Congress on Wednesday at 9 p.m.
Key hearings include: The House Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies hears from Labor Secretary Marty Walsh on Wednesday, April 28; EPA Administrator Michael Regan will testify before the Senate Environment and Public Works Committee on Wednesday, April 28 and the House Energy and Commerce Committee on Thursday, April 29.
KEY INSIGHTS:
CFIUS Is Eyeing Your Data. You Should, Too. The Federal government is aggressively scrutinizing foreign investment in the United States. Protecting your data and intellectual property is a critical — and often overlooked — element in mitigating deal risk. FTI’s experts in cyber security and government affairs offer their perspective.
ENERGY SECTOR
What We Are Watching:
IT’S DÉJÀ VU ALL OVER AGAIN: Politicians burnished their green credentials this week as the world came together virtually (mostly) for Earth Day. Sen. Ed Markey (D-MA) and Rep. Alexandria Ocasio-Cortez (D-NY-14) reintroduced their resolution for a Green New Deal, while outgoing New York City Mayor Bill de Blasio (D) announced he was suing energy companies for “greenwashing.” The lawsuit comes less than a month after the Big Apple lost their appeal on their last climate lawsuit against many of the same companies.
50 BY 30: President Joe Biden (D) set a new target of reducing U.S. emissions by 50% from 2005 levels by 2030. He’ll have to move fast, as U.S. emissions were only down about 13% from 2005 levels in 2019.
WYDEN BILL WOULD END FOSSIL FUEL TAX BREAKS: Senate Finance Committee Chairman Ron Wyden (D-OR) introduced a bill last week to end tax breaks for fossil fuels and create tax incentives for zero or net-zero emission technologies. “America’s tax code is rigged in favor of dirty fossil fuels and Big Oil,” Sen. Wyden tweeted. “It’s time to bring our energy tax credits into the 21st century to promote clean energy jobs and renewable energy.”
Week Ahead:
The Senate Committee on Energy & Natural Resources will hold a hearing on Tuesday, April 27, at 10 a.m. to review the Department of the Interior’s decision to pause oil and gas leasing on federal lands.
Key Insights:
OVERSIGHT PLANS TO END FOSSIL FUEL TAX DEDUCTIONS: There was a lot of news in the energy space this week, so we’re highlighting something that may have slipped under the radar. Rep. Ro Khanna (D-CA-17), chair of the House Oversight Committee’s Environment Subcommittee, told POLITICO he’s hoping to eliminate a host of tax provisions utilized by the fossil fuel industry (like the deduction for intangible drilling costs), in addition to revealing that his staff regularly texts with famed climate activist Greta Thunberg.
Financial Services Sector
What We Are Watching:
CAPITAL GAINS TAX: President Joe Biden is expected to raise long-term capital-gains tax for the wealthiest Americans to 43.4%, including a surtax. It would be higher than the top federal tax rate on wage income.
SEC STAFFING RAMPING UP: The SEC announced that Alex Oh has been appointed director of the Division of Enforcement. Prior to the SEC, Oh focused on anti-corruption cases as a partner at the law firm Paul, Weiss, Rifkind, Wharton & Garrison, before serving in the Justice Department’s criminal division in New York.
CLIMATE DISCLOSURES LEADERSHIP: Prior to the Institute of International Finance’s Policy Summit, Secretary Janet Yellen said the Biden administration will help drive international efforts to require companies to disclose their contributions to climate change. Following her remarks, the Investment Company Institute announced its support for the administration’s push to require companies to disclose their contributions to climate change.
Week Ahead
The Senate Banking Committee has two hearings this week. On the 28th, the committee will hold a hearing called, “The Reemergence of Rent-a-Bank?”, and one on the 29th called, “ The Dignity of Work”.
The House Financial Services Committee also has two hearings this week. On the 28th, the committee will hold a hearing called, “Examining the Role of Municipal Bond Markets in Advancing – and Undermining – Economic, Racial and Social Justice”, and one on the 29th called, “Closing the Racial and Gender Wealth Gap Through Compensation Equity”.
Key Insights:
Barely two weeks into his tenure, Gary Gensler’s key hires and increased staffing abilities indicate that the SEC will be tougher on enforcements. While at the CFTC Gensler took similar actions to increase the ability of the agency to crack down on corporations.
HEALTHCARE SECTOR
What We Are Watching:
EMERGENT UNDER INVESTIGATION BY HOUSE OVERSIGHT: On Monday, April 19, Rep. Carolyn B. Maloney, Chairwoman of the House Committee on Oversight and Reform, and Rep. James E. Clyburn, Chairman of the Select Subcommittee on the Coronavirus Crisis, launched an investigation into Emergent BioSolutions, Inc., regarding whether company leadership took advantage of their relationship with a former Trump Administration official to secure federal contracts for COVID-19 vaccine contracts, despite a history of quality control issues.
MALONEY RELEASES DOCUMENTS TO SUPPORT A PUSH TO HOLD SACKLER FAMILY ACCOUNTABLE FOR OPIOID EPIDEMIC: On Tuesday, April 20, Rep. Carolyn B. Maloney, the Chairwoman of the Committee on Oversight and Reform, released documents showing that the Sackler family, who own controlling share of Purdue Pharma, are collectively worth $11 Billion. Chairwoman Maloney released the documents to build support for her bill that aims to hold the Sacklers accountable for their role in the opioid crisis/epidemic, The SACKLER Act.
SHAREHOLDERS OPPOSE J&J CEO SALARY: The state of Illinois, OxFam and multiple religious organizations have filed letters with the Securities and Exchange Commission opposing Johnson & Johnson CEO Alex Gorsky’s new $30 million salary. The news comes after Gorsky received a 14 percent pay raise in 2020.
Week Ahead:
On Wednesday, April 28, 2021, at 9:30 a.m. ET, the House Ways and Means Subcommittee on Health will hold a hearing on Charting the Path Forward for Telehealth. The witness panel and hearing memo are yet to be released.
The House Judiciary Subcommittee on Antitrust, Commercial, and Administrative Law will hold a hearing Thursday at 1 p.m. on Treating the Problem: Addressing Anticompetitive Conduct and Consolidation in Health Care Markets.
Key Insights:
On Thursday, the Senate Finance Committee voted on party lines to advance Chiquita Brooks-LaSure for her nomination to serve as the Administrator of the Centers for Medicare & Medicaid Services (CMS). Brooks-LaSure’s confirmation must now go to a full vote in the Senate, however, Senator John Cornyn (R-TX) has indicated he may hold up the full vote due to his objections related to the Department of Health and Human Services (HHS) revoking Texas’ recent 1115 Medicaid waiver. The waiver granted Texas a 10-year extension of a Medicaid program and provided tens of billions of dollars in funding for uncompensated care. An HHS spokesperson said that Texas’ current waiver lasts through September 2022, which gives state officials enough time to go through the full public comment process. Senator Cornyn said he will not vote on Brooks-LaSure’s nomination until he has spoken with the White House Chief of Staff about the waiver. Despite his objections, Senate leadership can still make a motion to force a vote on her confirmation.
INDUSTRIALS SECTOR
What We Are Watching:
DEMS REACT TO IG REPORT ON TRUMP EPA: Senate Majority Whip Dick Durbin (D-IL) and other Congressional Democrats voiced their disgust of the Trump Administrations’ enforcement of EPA regulations. “When my colleagues and I requested that the OIG [Office of Inspector General] investigate malpractice at the Trump EPA, we expected to discover negligence, but to learn that political appointees delayed delivering important health information to residents and refused to monitor these facilities without an invitation is appalling and dangerous,” said Senate Majority Whip Dick Durbin (D-Il).
BIPARTISAN PLASTICS LEGISLATION INTRODUCED: Reps. Haley Stevens (D-MI) and Anthony Gonzalez (R-OH) introduced the “Plastic Waste Reduction and Recycling Research Act.” The bipartisan bill focuses on efforts around minimizing and reusing plastics. The bill includes funding for research and development of advanced recycling techniques known as “chemical recycling.”
REGAN WILL WORK WITH NGOS AND INDUSTRY ON WOTUS RULE: EPA Administrator Michael Regan committed to negotiating with environmental activist organizations and agriculture groups when crafting a new rule for implementing the Clean Water Act. Administrator Regan was appearing before the House Appropriations Committee to testify on behalf of President Biden’s budget request for the EPA for Fiscal Year 2022. Regan indicated he had no intention of reviving the Obama-era rule, would consult stakeholders ranging from activists to industry groups, and would publish a more balanced clean water rule in the future.
Week Ahead:
The House Appropriations Subcommittee on Defense will hold a hearing on the FY 2022 Navy and Marine Corps budget, with Acting Secretary of the Navy Thomas Harker expected to testify.
TECH, MEDIA & TELECOM SECTOR
What We Are Watching:
WITNESS INTIMIDATION?: Senate Judiciary Antitrust Chair Amy Klobuchar (D-Minn.) said her panel will look into allegations that Google sought to intimidate the dating app company Match for testifying against the company this week.
JOY RIDE FROM THR BACK SEAT: Consumer Reports says it was able to easily trick Tesla’s Autopilot system to operate without anyone in the driver’s seat.
RANSOMERS BEWARE: Following the ‘worst year ever’ for cyberattacks, an internal memo reveals the DOJ has formed a taskforce to combat the proliferation of ransomware attacks, targeting the entire ecosystem with prosecutions and more.
Week Ahead:
The Senate Judiciary Privacy, Technology, and the Law Subcommittee will hold a hearing on Wednesday on “Algorithms and Amplification: How Social Media Platforms’ Design Choices Shape Our Discourse and Our Minds.”
Key Insights:
AN FTC OPENING FOR TECH?: Last week, the Supreme Court ruled unanimously that FTC efforts to seek restitution from bad actors overstepped the agency’s legal authority from the Federal Trade Commission Act’s Section 13(b). As a result, the agency has lost one of its more powerful enforcement tools. This could end up being a break for tech companies facing antitrust scrutiny as FTC commissioners, to win Congress’ help in replacing lost authority, may need to show restraint to prove the agency won’t take overly broad interpretations of authority.
| The views expressed herein are those of the author(s) and not necessarily the views of FTI Consulting, Inc., its management, its subsidiaries, its affiliates, or its other professionals. |
