Oversight and Investigations Informer – November 20, 2020

What We Are Watching:

TRANSITION CONTINUES: President-elect Biden’s transition is rolling forward despite no concession from the Trump administration. Progressives are continuously pushing Biden to integrate their picks into his cabinet. One progressive favorite for EPA chief is Heather McTeer Toney, an Obama-era regional EPA official for the Southeast. In the Energy Department, Ernest Moniz, who held the role in the final years of the Obama administration, is on the short-list. Also on the list is his former deputy, Elizabeth Sherwood-Randall and Arun Manjumdar, the founding director of an energy research agency during the Obama years and currently part of the transition team.

COMMITTEES TAKING SHAPE: Senator John Barrasso (R-WY) announced that he plans to assume the position of chair of the Senate Energy and Natural Resources Committee in the next Congress. The announcement sets him up to potentially replace current Chair, Senator Lisa Murkowski (R-AK), who is stepping down from her post and anticipated to lead the Indian Affairs Committee.

NOMINATIONS ADVANCING: The Senate Energy Committee voted on Wednesday to advance FERC nominees Allison Clements and Mark Christie to the Senate floor. Clements, a Democrat and former attorney for the Natural Resources Defense Council, and Christie, a Republican who leads the Virginia Corporation Commission, the state’s utility regulator, have been waiting since September to be voted out of committee. 

Week Ahead:  

• University of Texas at Austin Energy Institute: U.S. Climate Policy in the Biden Administration
• This webinar will be led by Noah Kaufman as he explores the current climate policy landscape in the United States. It will start with an overview of the challenges, including emissions sources and technology and policy pathways to deep decarbonization. Then, it will highlight important recent trends that influence the policy landscape. Finally, it will describe prospects for climate action in 2021 once President-elect Joe Biden takes office and a new session of Congress gets underway.

Key Insights:

A bully pulpit on coal and grid resiliency has begun to emerge in both Chambers of Congress in recent weeks. Several Representative and Senators signed letters sent to FERC that are critical of the lack of action by the Commission on its docket for grid resiliency. The Senate letter focuses on the closure of coal-fired plants, while the House letter adds the closure of nuclear facilities into its priorities. Interestingly, the signatories of the Senate letter include Senator Barrasso who as reported above, is expected to lead the Energy and Natural Resources Committee. The letter is also signed by Senator Shelly Moore Capito (R-WV), who is expected to become the Chair of the Environment and Public Works Committee.

What We Are Watching: 

MERGER NEWS: PNC Financial Services Group has agreed to buy the U.S. operations of Spanish bank BBVA for $11.6 billion in a deal which would create the fifth-largest U.S. retail bank. The deal marks one of the largest bank acquisitions since the financial crisis. In response, Rep. Maxine Waters (D-CA-43) released a press release urging the Biden Administration to give a hard look at the merger.

DEPARTURE: SEC Chairman Jay Clayton announced he will step down at the end of the year. Clayton is a political independent nominated by President Trump, leaving after 3.5 years.

What We Are Watching: 

HHS REVERSES COURSE: Last Friday, HHS announced that it is canceling its $15 million communications contract with Atlas Research to implement a COVID-19 advertising campaign and will instead discuss a new, “science-based public education campaign.” The decision comes after Committee on Oversight and Reform Chairwoman Carolyn B. Maloney (R-NY-12) and Select Subcommittee on the Coronavirus Chairman Crisis James E. Clyburn (D-SC-6) sent a letter to the agency alleging that “HHS political appointees sought to use taxpayer dollars to advance a partisan political agenda and direct taxpayer money to their friends and allies.”

UPCODING ALLEGATIONS SETTLED: On Monday, the U.S. Department of Justice announced that Kaiser Foundation Health Plan of Washington will pay the federal government nearly $6.4 million to settle allegations that its Washington health plan upcoded risk adjustment claims submitted to Medicare in payment years 2011 and 2012.  A former billing manager alleged that the health plan claimed Medicare Advantage members were treated for diagnoses that were not supported by their medical records in order to increase payments. Kaiser denied the allegations, but agreed to settle.

GEORGIA WAIVERS AT RISK?: Democratic leaders from multiple Committees, including Senator Ron Wyden (D-OR), Ranking Member of the Senate Finance Committee, and Sen. Patty Murray (D-WA), Ranking Member of the Senate Committee on Health, Education, Labor, and Pensions, wrote a letter to CMS demanding that the agency immediately reverse Georgia’s 1115 waiver, which allows the state to expand Medicaid and add work requirements, and its 1332 waiver, which allowed Georgia to exit healthcare.gov. The lawmakers said the waivers violate federal law by creating barriers to coverage, therefore preventing the state from meeting Medicaid’s goal of extending insurance to all eligible residents.

Key Insights: 

SOME GOOD NEWS: As pharmaceutical companies continue to make progress with their COVID-19 vaccine candidates, Pfizer and BioNTech will file for emergency use authorization from the FDA for their COVID-19 vaccine today and more companies are expected to file for emergency use authorization soon. As the first authorization approaches, we expect increased Congressional oversight over the approval and distribution process to continue.

The General Services Administration has yet to declare former Vice President Joe Biden the winner of the November Presidential election leading to a delay in the formal transition process taking place to allow an orderly transition of power. Health experts warn that the delay in transition could interfere with the distribution of a COVID-19 vaccine, particularly if a vaccine is authorized before President-elect Biden takes office on January 20.

What We Are Watching: 

KENNY ROGERS IS NOT PROUD: Managers from Tyson’s Food have been accused of allegedly betting on employees contracting COVID –19, eliciting renewed scrutiny over its handling of the COVID-19 pandemic.  The families of former employees in Iowa are alleging that their managers started a betting pool on how many employees would contract COVID-19.  President and CEO Dean Banks announced the company suspended the managers targeted in the suit and launched an internal investigation led by former Attorney General Eric Holder. The meat processing industry has faced repeated scrutiny over its inability to protect employees from the spread of COVID-19 at plants throughout the U.S.

SEN. SHELLEY MOORE CAPITO (R-WV) TO LEAD EPW? Senate Environment and Public Works (EPW) Committee Chairman John Barrasso (R-WY) is headed to Senate Energy and Natural Resources Committee if Republicans maintain the majority in the 117th Congress. Chairman Barrasso’s relocation would pave the way for Sen. Shelley Moore Capito (R-WV) to lead EPW in the next Congress. As chair, Sen. Moore Capito would likely be more open to new legislation regulating PFAS, chemistries that have been facing tremendous heat from the trial bar and states Attorneys General.

Key Insights: 

MAYDAY!: The next Secretary of Transportation will inherit a slate of crises stemming from the COVID-19 pandemic, particularly with respect to commercial aviation and public transit systems struggling with declining revenue. The Biden Administration is expected to impose a mask mandate for airline passengers and crew. Airlines have self-imposed mask-wearing on flights but enforcement has lapsed on multiple occasions. President-elect Biden’s agency review team for the Department of Transportation includes at least nine members with experience in state and local transit. Los Angeles Mayor Eric Garcetti and former Chicago Mayor Rahm Emanuel are both considered candidates for Secretary of Transportation.

What We Are Watching:   

FB AND TWITTER BACK BEFORE CONGRESS: Facebook and Twitter CEOs testified before the Senate Judiciary Committee on Tuesday, facing questions around their content moderation policies before and after the election.  Republican Senators Josh Hawley (R-Mo.) and Ted Cruz (R-TX) led accusations of anti-conservative bias, while Democratic members highlighted cases where content moderation was lacking. The CEOs both invited modest Section 230 reforms for specific cases.

OBAMA ON THE INTERNET: In a wide-ranging interview with The Atlantic, former President Barack Obama called the new internet information ecosystem “the single biggest threat to our democracy.” Obama endorsed changes to Section 230 immunity for social media companies, saying “the degree to which these companies are insisting that they are more like a phone company than they are like The Atlantic, I do not think is tenable.”

FTC BELT TIGHTENING: The FTC outlined major cost cuts in a memo ahead of potential antitrust enforcement efforts against technology companies. Senator Hawley recently argued the agency has proven ineffective at holding big tech accountable and doesn’t need more funding, while other critics lament the agency’s difficult situation of facing Big tech money and lawyers – and emphasize the now greater disadvantage.

Key Insights:  

BLACK FRIDAY 2020 – With Black Friday just around the corner and COVID-19 cases rising, expect increased attention on ecommerce in the weeks ahead. As many businesses struggle, lawmakers will turn to changes taking place in the economy and their impact on workers. Apple’s move to lower fees in the App store for smaller sellers underscores awareness of challenges ahead.

ANTITRUT LEADERSHIP RACE FALLOUT – Leading antitrust enforcement voice Rep. David Cicilline (D-R.I.) lost a competitive race for Assistant Speaker to Rep. Katherine Clark (D-Mass.) 135-92. While surely a disappointment for him, the result means he’ll have more time and focus to try and build bipartisan consensus around efforts to change and strengthen antitrust enforcement.