Oversight and Investigations Informer – April 5, 2022

What We Are Watching:

BIG OIL CEOS TO FACE CONGRESS, AGAIN: The House Committee on Energy and Commerce will hold on a hearing on Wednesday April 6, where executives from six oil companies, including Shell and ExxonMobil, will testify on the industry’s role in gas prices. The hearing entitled, “Gouged at the Gas Station: Big Oil and America’s Pain at the Pump” trumped another planned hearing by the House Natural Resources Committee after CEO’s of some companies declined invitations to appear. The Senate Commerce Committee is expected to hold a similar hearing in the coming weeks.

OVERSIGHT GOES POSTAL: The House Oversight and Reform Committee is scheduled to meet this week to hear testimony from United States Postal Service Inspector General and Executive Director, Next Generation Delivery Vehicle about plans to purchase up to 148,000 gas-powered delivery trucks to replace the aging postal fleet, a move that Congressional Democrats argue could see plans to electrify the postal fleet pushed back by some 20 years. Democrats previously launched a probe into the vehicle manufacturer to examine the company’s labor practices and its abilities to produce electric vehicles.

CRYPTO UNDER THE MICROSCOPE: The Biden Administration’s science and technology team is seeking public comment on crypto’s energy usage and climate implications after the President issued a first of its kind executive order that attempts to coordinate the federal government’s approach to the burgeoning technology. This move comes on the heels of Congressional hearings that occurred earlier this year examining the energy impact of the blockchain and crypto currency mining.

Week Ahead:  

• The House Committee on Oversight and Reform will hold a hearing entitled “It’s Electric: Developing the Postal Service Fleet of the Future” on Tuesday, April 5, 2022.
• The Senate Committee on Commerce, Science, and Transportation will hold a hearing entitled “Ensuring Transparency in Petroleum Markets” on Tuesday, April 5, 2022.
• The House Energy and Commerce Subcommittee on Oversight and Investigations will hold a hearing entitled “Gouged at the Gas Station: Big Oil and America’s Pain at the Pump” on Wednesday, April 6, 2022.

What We Are Watching:

CRACKDOWN ON SPACS: Last week, the Securities and Exchange Commission (SEC) proposed a crackdown on special-purpose acquisition companies (SPACs) attempting to give investors the ability to sue if they were misrepresented about future financial gains. Public comments on the proposal are due later this spring. The proposal comes as federal lawmakers and consumer groups have increasingly raised alarms over SPACs since their popularity boomed in the last few years.

Week Ahead:  

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

• The Subcommittee on Oversight & Investigations will hold a hearing entitled, “An Enduring Legacy: The Role of Financial Institutions in the Horrors of Slavery and the Need for Atonement,” on Tuesday, April 5.
• The Full Committee hearing will hold a hearing entitled, “The Annual Testimony of the Secretary of the Treasury on the State of the International Financial System,” on Wednesday, April 6.
• The Senate Committee on Banking, Housing, and Urban Affairs will convene a hearing entitled, “Keeping Markets Fair: Considering Insider Trading Legislation,” on Tuesday, April 5.

Key Insights:  

Representative Carolyn Maloney (D-NY), Chairwoman of the Committee on Oversight and Reform, and Rep. Stephen Lynch (D- MA), Chairman of the Oversight and Reform Subcommittee on National Security, asked Credit Suisse to provide information on the bank’s compliance with sanctions related to the war in Ukraine. Specifically, the letter asks about the bank’s financing of yachts and aircraft owned by Russian oligarchs. The letter comes after news reports that Credit Suisse instructed investors in a recent debt deal to destroy and erase information about its dealings with wealthy clients. As the war in Ukraine continues, lawmakers will continue to express interest in investigating any alleged sanctions evasion.

What We Are Watching:

SENATE FINANCE COMMITTEE MEMBERS CALL OUT INSURERS FOR FAILURE TO COVER MENTAL HEALTH SERVICES: During a Senate Finance hearing on behavioral health last week, Chairman Ron Wyden (D-OR) and Ranking Member Mike Crapo (R-ID) expressed concern that insurers are violating parity laws – which require payers to cover mental health services on par with physical health. Chairman Wyden also criticized the increasing number of “ghost networks” that force patients to pay out of pocket for mental health services when providers on a list covered by insurance aren’t accurate or available. Senators Crapo and Wyden pledged to create a bipartisan bill aimed at expanding mental health services. Furthermore, President Joe Biden’s 2023 budget request calls for $275 million over 10 years to increase the U.S. Department of Labor’s  capacity to ensure health plans are complying with parity laws.

AMERICAN HOSPITAL ASSOCIATION OPPOSES PLANS TO REVISE MERGER GUIDELINES: In response to the Federal Trade Commission (FTC) and the U.S. Department of Justice’s (DOJ) call for public input about their review of mergers and acquisition (M&A) guidelines, the American Hospital Association (AHA) cited opposition to any revisions. In a letter sent to regulators on Wednesday March 30  the AHA said changes made to M&A guidelines would limit the ability of hospitals to plan future mergers while also significantly disrupting the potential for hospitals to evaluate prospective mergers and limiting the ability of hospitals to provide comprehensive and geographically accessible care to their patients. The AHA also pushed regulators to instead focus on “anticompetitive mergers and deceptive conduct by insurance companies.”

Week Ahead:

• The Senate Committee on Health, Education, Labor, and Pensions will hold a hearing entitled, “FDA User Fee Agreements: Advancing Medical Product Regulation and Innovation for the Benefit of Patients” on Tuesday, April 5.
• The House Committee on Energy and Commerce will hold a hearing entitled, “Communities in Need: Legislation to Support Mental Health and Well-Being” on Tuesday, April 5.

Key Insights:  

Last week, the House passed the Affordable Insulin Now Act which would cap insulin prices at the lower option of $35 per month or 25 percent of an insurance plan’s price. The legislation passed in a 232-193 vote, with 12 Republicans voting in favor of the bill, demonstrating bipartisan support for lowering insulin costs. However, critics such as Americas Health Insurance Plans (AHIP) argue that an insulin price cap alone is not enough to address rising prescription drug prices. Sens. Jeanne Shaheen (D-NH) and Susan Collins (R-ME) are crafting a broader bill to address insulin prices, though details are still in the works. The Affordable Insulin Now Act will now proceed to the Senate, where Democrats, led by Sen. Raphael Warnock (D-GA), will work to secure at least 10 votes from Senate Republicans which is needed to surpass a filibuster and allow the bill to advance through the chamber. This Congressional action comes at a time when drug costs are top of mind of voters. In a recent poll from the Kaiser Family Foundation, 61% of respondents said limiting the ability of drug companies to raise prices higher than the rate of inflation should be a “top priority” for Congress.

What We Are Watching:

FORD RECALLS 737,000 VEHICLES OVER SOFTWARE AND FIRE-RISK CONCERNS: The Ford Motor Company is recalling over 700,000 vehicles, which include some Bronco and Escape models, due to concerns about possible oil leaks and a software issue that could affect braking functions. Ford reported that it is aware of eight fires that could be related to the issue, with no related injuries or crashes.

LEGISLATION INTRODUCED TO STRENGTHEN AVIATION SAFETY STANDARDS IN FOREIGN REPAIR SHOPS: Representative Peter Defazio (D-OR), Chairman of the House Transportation and Infrastructure Committee, introduced The Safe Aircraft Maintenance Standards Act, designed to improve the FAA’s oversight of foreign repair stations.

Week Ahead:

• The Senate Environment and Public Works Committee will hold a hearing on the EPA’s proposed 2023 budget featuring testimony from EPA administrator Michael S. Regan on Wednesday, April 6.
• The House Transportation and Infrastructure Committee holds a hearing on the National Transportation Safety Board reauthorization on Wednesday, April 6.

What We Are Watching:

U.S. Department of Justice (DOJ) BACKS CONGRESSIONAL ANTITRUST LEGISLATION: In a letter to Congressional leaders last week, the DOJ endorsed the American Innovation and Choice Online Act, which prohibits large digital platforms such as Amazon and Google from favoring their own products and services over competitors. The letter argues large tech platforms’ dominant position gives them unchecked power to influence the prospects of other businesses, and that restricting their conduct could carry significant benefits for consumers and the economy at large.

META USES OUTSIDE FIRM TO FUEL TIKTOK SCRUITNY: Internal emails released last week revealed Facebook’s parent company Meta hired an outside Republican consulting firm to orchestrate a nationwide public relations campaign to increase scrutiny around Tik Tok. The firm retained, Targeted Victory, led a campaign to place op-eds in local outlets and generate media interest in risks to American consumers posed by the popular music and dancing app, reportedly designed to shift the focus from multiple negative media cycles around Facebook.

AMAZON SEES FIRST SUCCESSFUL UNION VOTE: Employees at an Amazon warehouse on New York’s Staten Island voted Friday to join a union despite a strong campaign against the effort by the company. The tally was 2,654 votes in favor of joining the union and 2,131 opposed. The Staten Island facility, known as JFK8, is Amazon’s largest in New York.

Week Ahead:

• On Wednesday April 6, House Majority and Minority Leaders Steny Hoyer and Kevin McCarthy will host their 4^th annual Congressional Hackathon, convening congressional staff and developers from digital companies to explore the role of digital platforms in the legislative process.

Key Insights:

In President Biden’s FY23 Budget Request released last week, antitrust agencies saw a meaningful boost in funding requests relative to past years. The White House promised an additional $88 million for the U.S. Department of Justice antitrust division over FY 2022 and an extra $139 million for the Federal Trade Commission. By comparison, Congress appropriated $376.5 million to the FTC in FY 2022, a $25.5 million increase from the prior year, and $197.7 million for the DOJ’s antitrust division, a $13.4 million increase. While these topline appropriation numbers now must work their way through the Congressional budget process, for the moment persistent concerns raised by agency leadership on resources have produced an in-kind response from the White House.