Oversight & Investigations Informer 2/5/21
What We Are Watching:
COVID RELIEF ADVANCES: The Senate approved a budget bill that moves forward President Joe Biden’s $1.9 trillion coronavirus relief measure, with Vice President Kamala Harris casting the tie breaking vote early on Friday morning after an all-night ‘vote-a-rama’ session. The House passed the measure on a party line vote on Friday afternoon.
SENATE POWERSHARING AGREEMENT: More than two weeks after Democrats secured their Senate majority, the chamber formally adopted a power-sharing agreement that allows for committees to organize and Democrats to take charge. The deal allows for equal numbers of Republicans and Democrats on Senate committees, equal staff budgets for both parties and for Democrats to limit the so-called filling of the tree, a procedural maneuver that blocks the minority from offering amendments.
HOUSE GOP TURMOIL: Rep. Liz Cheney (R-WY) retained her post as House Republican Conference Chair in a 145-61 House Republican Caucus referendum sparked by her support for President Donald Trump’s impeachment last month. The full House voted to remove Rep. Majorie Taylor Greene (R-GA) from her committee assignments, with 11 Republicans voting with Democrats.
The House and Senate are both in session next week. Key hearings include:
Neera Tanden’s nomination hearings to be Director, Office of Management and Budget: Before the Senate Homeland Security and Government Affairs Committee on February 9 at 9:15 a.m. and before the Senate Budget Committee on February 10 at 10 a.m.
Congress is wasting no time in exercising its oversight muscles, as members call for hearings on the Robinhood stock trading platform, release a stinging report on baby food, launch investigations into the meat packing industry, and hold hearings on the federal government COVID response. Private industry would be smart to prepare for a strenuous year ahead on the Washington front.
What We Are Watching:
REGAN EARNS BIPARTISAN PRAISE AT CONFIRMATION HEARING: President Joe Biden’s nominee to lead the Environmental Protection Agency, Michael Regan, seemed to win over Republicans even as they disagreed with President Biden’s environmental agenda. “He will sometimes take on initiatives I will disagree with, most likely vote against, but I do believe that he will be somebody that we can rely on to be fair with the reality of the change in administration,” Senator Thom Tillis (R-NC) said during the hearing.
PROGRESSIVE LEADS OVERSIGHT ENVIRONMENT PANEL: Rep. Ro Khanna (D-CA-17) will lead the House Oversight and Reform Committee’s Environment subcommittee in the new Congress, boosting the prominence of climate issues before the committee. During his re-election campaign he pledged to “hold oil and gas corporations accountable” and has previously advocated for California to end new fossil fuel development.
KLOBUCHAR’S DROPS ANTI-TRUST BOMB: Sen. Amy Klobuchar (D-MN), the incoming Senate Judiciary antitrust chair, released an antitrust reform bill this week that would make it harder for big U.S. companies to make deals. Companies with more than $100 billion in annual revenue would need to show the merger wouldn’t squash competition, throwing cold water on some of the rumored merger talks within the U.S. energy industry after a tough year. The Wall Street Journal reported this week that the CEOs of ExxonMobil and Chevron had discussed a possible merger, though sources familiar with the talks said they were not ongoing but could resume later.
The House Energy and Commerce Committee’s Environment and Climate Change Subcommittee will hold a hearing on Tuesday, February 9, at 12 p.m. entitled “Back in Action: Restoring Federal Climate Leadership.”
EPA’S CLEAN SLATE FOR POWER PLANT RULE: With Michael Regan’s confirmation seemingly assured, one of his first orders of business at the EPA will be to craft a new plan to regulate emissions from power plants, assuming President Biden can succeed where Presidents Obama and Trump failed. A court ruled last month that the EPA could regulate emissions “beyond the fenceline,” meaning key components of President Obama’s Clean Power Plan could come back into play. Regan has his work cut out for him, as Republicans pressed him during his confirmation hearing on how much influence former EPA administrator Gina McCarthy – an architect of the Clean Power Plan – would wield over him from her new hazily defined position as a climate advisor to the president.
FINANCIAL SERVICES SECTOR
What We Are Watching:
YELLEN ON GAMESTOP: U.S. Treasury Secretary Janet Yellen called a meeting of top financial regulators this week to discuss market volatility driven by trading of GameStop other stocks favored on social media. The meeting is viewed as an initial discussion on the topic.
CEA HEAD: The Senate Banking Committee approved the nomination of Cecilia Rouse, an economist at Princeton, to be the chair of the Council of Economic Advisers.
SEC Seeks Comments: The SEC published a request for public comment on money markets funds as highlighted in a report of the President’s Working Group.
Chairwoman Maxine Waters announced this week the February hearing calendar which includes the much-anticipated hearing on the market volatility driven by GameStop.
Brookings is hosting an event to talk about blockchain, digital currencies, and other recent developments in digital markets entitled, “The future of blockchain and digital markets: A perspective from the World Economic Forum”.
The addition of Elizabeth Warren to the powerful Senate Finance Committee adds to a growing list of Wall Street adversaries in prominent positions in Washington D.C.
What We Are Watching:
MCKINSEY TO PAY $573 MILLION FOR ROLE IN OPIOID CRISIS: On Thursday, McKinsey & Company reached a $573 million settlement agreement with nearly 50 states and the District of Columbia regarding its role in perpetuating the nation’s opioid crisis. State Attorneys Generals allege that through their consulting work, McKinsey aided in the marketing and sales of opioids, including Perdue Pharma’s Oxycontin.
NEW YORK AG FINDS NURSING HOMES ENDAGERED LIVES OF ELDERLY: Last Friday, New York Attorney General Letitia James released a report on the state’s nursing homes’ response to the COVID-19 pandemic. According to the report, multiple state nursing home facilities failed to comply with COVID-19 protocols, placing both residents and staff at increased risk of catching the virus. The report’s findings suggest that thousands more nursing home residents died of COVID-19 than state officials previously reported.
UNITED NETWORK FOR ORGAN SHARING SUBPOENAED BY SENATE LAWMAKERS: On Thursday, Senate Finance Committee leaders, Sen. Ron Wyden (D-OR) and Sen. Chuck Grassley (R-IA) subpoenaed the United Network for Organ Sharing for documents concerning its oversight of organ transplant centers. In a statement released on Thursday, the Senators wrote that their investigation of the company yielded information on, “the improper use of Medicare funds, conflicts of interest and gaps in oversight.”
This week, the House Energy and Commerce Committee held three hearings regarding the nation’s COVID-19 response. Congressional Democrats largely focused on the failures of the Trump Administration’s efforts to combat the virus, while their Republican colleagues touted the achievements of Operation Warp Speed. Congressional Committees in the House are likely to continue its review into the COVID-19 response in the coming weeks.
The Biden Administration continued to review healthcare policies enacted under Trump Administration. The Biden Administration signed an Executive Order that requires agencies to review Trump Administration policies that create barriers to immigration, including the Administration’s controversial public charge rule, which allows federal officials to deny green cards to immigrants based on their potential use of public benefits.
What We Are Watching:
MORE FURLOUGHS COMING FROM AIRLINES: American Airlines sent approximately 13,000 furlough notices to employees this week in anticipation of the latest round of federal payroll relief expiring next month. American CEO Doug Parker cited the “the vaccine is not being distributed as quickly as any of us believed” as well as recently added restrictions on international travel as the latest downward pressures on travel demand. The announcement from American came a few days after their rival United Airlines disbursed furlough warnings to 14,000 staff members.
MEATPACKING INVESTIGATION: The House Select Subcommittee on the Coronavirus is launching an investigation into meatpacking giants JBS, Tyson Foods and Smithfield Foods regarding the coronavirus outbreaks at their plants. Chairman Jim Clyburn (D-SC) wrote: “I am concerned that under the Trump Administration, OSHA did not fulfill its mission to protect vulnerable meatpacking workers during the pandemic.”
TOXINS IN BABY FOOD? The House Oversight Subcommittee on Economic and Consumer Policy examined baby foods made by Nurture Inc, Hain Celestial Group Inc, Beech-Nut Nutrition and Gerber, a unit of Nestle and found “dangerous levels of toxic heavy metals.” The report urges federal regulators to set maximum levels of toxins permitted to be contained in baby food.
HOUSE DEMS MOVE QUICKLY ON FORCED ARBITRATION: The House Judiciary Committee is holding a hearing next week on “Justice Restored: Ending Forced Arbitration and Protection Fundamental Rights.” House Democrats have fought for years for legislation that targets forced arbitration clauses in corporate contracts. Such reforms are expected to be a boon for trial lawyers by exposing companies to significantly more litigation risk. If House Democrats are successful, ending forced arbitration agreements would eliminate a critical legal tool that insulates companies from costly legal suits.
FTI thought leadership piece Biden’s Environmental Justice Plan: A Return to Regulating Behind Closed Doors” explores the ways in which the new Biden administration will begin dismantling key Trump administration policies related to industry and the environment to implement President Biden’s Environmental Justice Plan. This will include a return to sue and settle tactics, and using Supplemental Environmental Projects (SEPs) in connection with settlement agreements.
TECH, MEDIA & TELECOM SECTOR
What We Are Watching:
ACTION IN ANTITRUST: Sen. Amy Klobuchar (D-MN), the incoming head of the Senate antitrust subcommittee, introduced a bill that would bar companies that dominate their sectors from making acquisitions unless they can prove their deals don’t “create an appreciable risk of materially lessening competition.”
CLEARVIEW NOT GIVEN THE CLEAR: Canadian authorities declared that facial recognition app Clearview AI needed citizens’ consent to use their biometric information, and told the firm to delete Canadians’ faces from its database.
TOUGH ON TECH: Not to be outdone in the stampede to get tough on tech companies, House Energy & Commerce Republicans this week pressed Chairman Frank Pallone to convene a hearing with the CEOs on Google, Facebook, Apple, and Twitter.
SUBCOMMITEE ASSIGNMENTS: A number of key House committees for technology, media, and telecommunications committees have now announced subcommittee assignments: