Public Affairs & Government Relations

Oversight and Investigations Informer – 12/11/2020

NOTABLE DEVELOPMENTS

What We Are Watching:

Biden announced a number of nominations, including: Retired General Lloyd Austin for Secretary of Defense; Tom Vilsack for another stint as Secretary of Agriculture; Denis McDonough, a former chief of staff to President Barack Obama, to serve as Secretary of Veterans Affairs; Susan Rice, Obama’s former national security adviser, to run the White House Domestic Policy Council; Rep. Marcia Fudge (D-OH) to lead the Department of House and Urban Development; Katherine Tai, the chief trade counsel for the House Ways and Means Committee, to be U.S. Trade Representative.

Congress passed a short-term spending bill to extend government funding until Dec. 18th while negotiations continue over an omnibus spending bill and COVID related economic relief. A central sticking point in COVID relief negotiations concerns state, local, and school relief, along with liability protections.

Congress passed the $740 billion annual National Defense Authorization Act with veto proof margins in both the House and the Senate. President Trump has threatened to veto the measure over provisions requiring the renaming of military bases named after Confederate generals.

The Congressional Oversight Commission held a hearing on Thursday to examine the funds authorized by the CARES Act that provide up to $17B for loans and loan guarantees to businesses critical to maintaining national security. Treasury Secretary Steven Mnuchin testified and defended his agency’s $700M loan to trucking company YRC Worldwide.

Week Ahead:   

The House and Senate are both in session next week. Key hearings include: Part II of House Oversight’s examination into Purdue Pharma’s role in the opioid epidemic on December 15 at 10 a.m.; A Senate Homeland Security and Government Affairs Committee hearing on irregularities in the 2020 Election on December 16th at 10 a.m.

ENERGY SECTOR

What We Are Watching:

VILSACK’S BACK: Former Iowa Governor Tom Vilsack is set to reprise his role as U.S. Agriculture secretary in the Biden administration, building on the eight years he served in that position under President Obama. The Des Moines Register notes that if Vilsack is confirmed, he “would become the second-longest-serving agriculture secretary after James Wilson, another Iowan, who served in that role from 1897-1913.” POLITICO reports that Vilsack is eager to promote soil carbon storage as a way to advance Biden’s climate goals while supporting farmers, yet some green groups feel that agenda is offset by Vilsack’s support for ethanol, which opponents say contributes to global deforestation, algal blooms, and other environmental impacts.

Week Ahead:   

POLITICO: Energy Policy in the Biden Era – 1 p.m., December 17, 2020. The virtual program will feature a conversation between POLITICO CEO Patrick Steel and API CEO Mike Sommers.

Key Insights: 

FUTURE OF EV’S IN AMERICA: As states like California, Colorado, and Nevada – and potentially the federal government – push mandates to put millions of EVs on the road within the next few decades, a major question remains unanswered: Will the United States have the reliable supply of critical minerals needed to meet proposed EV goals? Or will it have to rely on imports from competitor countries? FTI Consulting published an article this week exploring the types of decisive action needed to support U.S. critical mining.

CLEMENTS FOR FERC CHAIR?: Democrat-pick Allison Clements was sworn in to FERC on Tuesday. Though Commissioner Richard Glick has a longer tenure on the commission, some are pushing for President-Elect Biden to pick Clements to chair the group. Clements is said to be favored by progressives, who value her work as an attorney for the NRDC and expertise in clean energy, and by Senate Minority Leader Chuck Schumer (D-NY), who originally nominated her nearly two years ago.

FINANCIAL SERVICES SECTOR

What We Are Watching:

SUPREME COURT: The Supreme Court is hearing a case on Fannie Mae and Freddie Mac and disputing the U.S. government’s decision to sequester the mortgage giants’ profits, which was met with a skeptical reception Wednesday.

U.S. AUDIT WATCHDOG: The Public Company Accounting Oversight Board, a U.S. audit watchdog, is planning to change the way it picks audits for inspection and conducts its evaluation, part of an effort to assess the impact of remote-work constraints on the quality of audits.

CTFC EXIT: CFTC Chair Heath Tarbert will leave the derivatives regulator early next year; his term would have expired on April 13, 2024.

BLACKROCK SHAREHOLDER RESOLUTIONS: BlackRock has vowed to back more shareholder resolutions on climate and social issues at annual meetings, marking a shift in approach after a “significant review” of its policies around AGM voting and discussions with companies, BlackRock said.

CFPB RULES FINALIZED: The Consumer Financial Protection Bureau finalized two rules relaxing mortgage-lending requirements regarding a borrower’s ability to repay, in a bid to boost the range of products available to lower-income, riskier customers.

Week Ahead:   

Senate Committee on Banking, Housing, and Urban Affairs Subcommittee on Economic Policy will hold a remote hearing titled, “US-China: Winning the Economic Competition, Part II, on Wednesday December 16th.

The Center for American Progress is hosting a virtual event titled, “The Financial System & Climate Change: A Regulatory Imperative”, on Friday December 18th.

Key Insights: 

CFTC Chair Heath Tarbert’s announcement that he is leaving the agency coupled with SEC Chair Jay Clayton’s early departure will allow Biden an earlier start on naming heads to the independent agencies.

HEALTHCARE SECTOR

What We Are Watching:

CARES ACT AND VULNERABLE POPULATIONS: Last Friday, Sen. Elizabeth Warren (D-MA) and Rep. Ayanna Pressley (D-MA-7) sent a letter to U.S. Comptroller General of the Government Accountability Office (GAO) Gene L. Dodaro requesting the agency conduct a review of how COVID-19 relief funds have been distributed to businesses and healthcare providers in communities serving high-need populations. The letter specifically requests information on populations that are disproportionately impacted by COVID-19, including communities of color, as well as Native American, medically underserved, and low-income communities.

BOOST OR BUST?: Raja Krishnamoorthi (D-IL-8), Chairman of the Subcommittee on Economic and Consumer Policy, and Subcommittee Member Katie Porter (D-CA-45) released a report on an investigation into the safety of child booster seats from seven prominent booster seat manufacturers. Chairman Krishnamoorthi called the findings “alarming,” saying that the Subcommittee found that some manufacturers knew the booster seats were “unsafe for children under 40 pounds,” but “continued to market their use for 30-pound children.”

CDC STAFF ASKED TO COVER FOR SENIOR HHS OFFFICIAL: On Thursday, Chairman of the Select Subcommittee on the Coronavirus Crisis James E. Clyburn (D-SC-6) sent a letter to CDC director Robert Redfield and HHS Secretary Alex Azar alleging that Redfield instructed staff to delete an email from HHS adviser Paul Alexander that Clyburn says “demanded that CDC alter or rescind truthful scientific reports he believed were damaging to President Trump.”

Week Ahead:   

The House Committee on Oversight and Reform will hold a hearing on Tuesday, December 15th on the role of Purdue Pharma and the Sackler family in driving the opioid epidemic. Witnesses invited to participate initially declined to testify, leading Chairwoman of the Committee on Oversight and Reform, Carolyn B. Maloney (R-NY-12), to send letters to Sackler family lawyers threatening to issue a subpoena if they failed to testify at the hearing.

Key Insights: 

On Thursday, an FDA Advisory Panel recommended that FDA authorize Pfizer and BioNTech’s COVID-19 vaccine candidate, meaning Americans in phase one groups, including healthcare workers, could receive the first dose of the vaccine this month. Meanwhile, Moderna has started to study its COVID-19 vaccine candidate in adolescents, meaning the company might try to achieve approval for its use in adolescents before the start of the 2021 school year.

In a 343-67 vote, the U.S. House of Representatives approved a short-term funding measure to extend appropriations to the federal government through December 18, providing Congress more time to discuss finalizing appropriations bills for the FY2021 and possibly passing another coronavirus stimulus package.

Meanwhile, President-elect Joe Biden announced his plan to reopen most schools, distribute 100 million COVID-19 vaccine shots, and require masks on interstate transport and in federal buildings within his first 100 days in office.

INDUSTRIALS SECTOR

What We Are Watching:

BIDEN ANNOUNCES SECRETARY OF DEFENSE: President-Elect Joe Biden announced earlier this week General Lloyd Austin as his nominee for Secretary of Defense. General Austin will be the first Black person to run the Pentagon and his nomination was praised by Members of the Congressional Black Caucus and civil rights organizations. General Austin beat out Michele Flournoy who was widely considered the frontrunner for the position in the weeks before and after the November election. Several progressive organizations have risen in opposition to General Austin’s nomination, arguing it erodes the longstanding tradition of civilian leadership of the U.S. military.

CONGRESS PASSES NDAA WITH ANTI-CHINA PROVISIONS: Earlier today, Congress passed the National Defense Authorization Act (NDAA) for Fiscal Year 2021. Lawmakers had mixed success adding language to the annual defense policy bill intending to exclude Chinese firms from accessing critical U.S. industries. Senator John Cornyn (R-TX) successfully secured a provision barring Chinese firms from providing jet boarding bridges to U.S. airports. However, Congress removed a federal ban on Chinese and other foreign-made drones from the final version of the defense bill. The NDAA instead asks the U.S. Department of Defense and other agencies to brief Congress no later than October 1, 2021 on the threat posed by federal use of foreign-made drones.

NISSAN SWITCHES SIDES IN LITIGATION: This week Nissan joins General Motors in withdrawing from the Trump Administration’s lawsuit challenging California’s right to enforce its own carbon emissions standards for automobiles. In a statement announcing the decision, Nissan said going forward it would work with California and the incoming Biden Administration to establish a national standard for emissions.

Week Ahead:   

A&D AND TRANSIT SECTORS CALL FOR RELIEF: Congressional negotiations for a bipartisan COVID-19 relief bill appeared to have slowed down yet again. Aerospace companies in the defense and commercial sectors are expected to intensify their lobbying efforts for more relief in hopes of a deal in the days leading up to Christmas. Similarly, public transit authorities are renewing their lobbying effort to include $32 billion for transit systems in the next COVID-19 relief bill.

TECH, MEDIA & TELECOM SECTOR

What We Are Watching:

STATES, FEDS UNFRIEND FB: Federal antitrust authorities and 48 states launched a legal case against Facebook this week, in lawsuits that seek to break up the company from Whatsapp and Instagram and address years of complaints about its worldwide social networking empire. 

SUPREME COURT CONSIDERS COMCAST BID: The Supreme Court asked for the government’s view on a bid from Comcast as the company tries to defend itself from a $160 million suit from Viamedia accusing Comcast of monopolizing local advertising markets. 

TIKTOK BLOCK: A second federal judge blocked the Trump administration’s attempt to ban TikTok downloads in the U.S., saying the government’s ban likely overstepped its authority under the International Emergency Economic Powers Act. 

FCC ACTS ON SPY TALK: The FCC voted 5-0 to force removal of Huawei and ZTE equipment is wireless and wireline networks receiving U.S. subsidies. Separately, the commission acted to revoke China Telecom’s 20-year old authorization to operate in the U.S. 

Week Ahead:   

FTI and Perkins Coie will co-host a virtual panel discussion on Thursday, December 17 with leading privacy and data security representatives from business and government on evolving privacy regulation for both global business and consumers. Panelists include: Jason Van Beek, General Counsel to Sen. John Thune; Chris Calabrese, Senior Director of Privacy and Data Policy at Microsoft; Dominique Shelton Leipzig; co-chair of Perkins Coie’s Ad Tech Privacy & Data Management practice; and FTI’s own Global Strategic Communications Head of Technology, Media, and Telecommunications, Charles Palmer. Click here to register.

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