The Democratic Shadow Lengthens

Written by Adam Goldberg, Co-Founder and Partner

Every time power changes in the U.S. Congress, the transition promises substantial shifts in congressional oversight. Given the unprecedented laissez–faire approach that Republicans have taken this term, the anticipated change in control of at least the House of Representatives promises an equally unprecedented spike in corporate oversight. For those companies who have been luxuriating in congressional abstinence, communications teams best start getting ready now – those press conferences, document releases, and public hearings will be coming hot and heavy before you know it.

If your company has not previously been baptized by a committee subpoena, the most important step to preparing is understanding that congressional investigations are unlike any other legal or quasi-legal challenge your company might have faced. There are very few rules, what rules exist offer little protection, and this means that you need to be ready to respond on a moment’s notice, during the investigation’s entire life cycle, to false and misleading allegations by members of Congress or committee investigators.

This is no easy task – committees can release cherry-picked documents, stand ready to attack CEOs and subpoena them if they don’t appear voluntarily, and wield click-baiting press conferences to attack you. Indeed, get used to learning about developments from reporters because investigators often leak to them first before sharing developments with the companies they are targeting, including the fact that the committee is investigating you.

Simply put, these investigations are free-for-alls demanding pushback and rapid response. Members of Congress and their investigators can say whatever they want about you from Capitol Hill’s confines, protected from any liability for those statements by the Constitution’s Speech or Debate Clause. Official committee reports that make damning claims are often issued only by one party’s members, those in control, and fairness and nuance are not their hallmarks. Committees often coordinate with third-party groups hostile to you. And, I am sure you have seen one of the legion of viral clips of executives’ testimonies gone wrong.

Notwithstanding the above, it is critical to recognize that you are not powerless. Stakeholder communications are critical throughout the process – use your voice and get the full facts and messages out there. Be proactive about getting your messages out there – don’t sit back and wait to play defense. You will know what is being looked at – get out there and speak to the extent helpful. Also importantly, as with any investigation or crisis, get in synch with the lawyers and government affairs team. Hopefully, you will not have to battle, but if it becomes a battle, you will need your forces strategizing and acting together.

So, how do you get ready now? Work with your legal and government affairs teams to assess your risk level and vulnerabilities. In the data center business? In crypto? Gave to the White House ballroom? A law firm that cut a deal? Benefitted from environmental regulatory retrenchment? These are just some of the likely targets if Democrats succeed in taking at least the House. Watch out if they take the Senate as well. So, take the time now and determine the chances that Congress could come calling.

If you think you are at risk, get into the details now. Put together the key facts and the messaging. Be ready to communicate with your stakeholders and the media the moment you learn that you are being investigated. Have a plan in place on how to manage the investigation, with a pre-determined team ready to go.

Of course, being prepared to act does not mean that you should act. Every chairperson and investigator conducts investigations differently, both in terms of aggressiveness and public spectacle. Addressing an investigation requires calibrating your response to the fairness being shown and the business, reputational, and legal impacts it imposes. Many investigators are earnestly trying to find the facts, will treat you respectfully, and are not interested in witch hunts and kangaroo courts. That many are, however, means that you need to be flexible.

So, take heed. The shadow is lengthening over some of you reading this. On January 3, 2027, the 120th U.S. Congress will be sworn in. If the polls and pundits are right, that means a deluge of investigations is coming for the global corporate community. Build your boat now so you can sail smoothly through the roughest waters.