Understanding H.R. 1 (Part 1): Corporate & Trade Association Campaign Activity

By Robert Kelner, Robert Lenhard, Derek Lawlor, Perrin Cooke and Andrew Garrahan on Posted in Campaign Finance

With a growing chorus of support across the progressive landscape, the For the People Act of 2021 has emerged as a key legislative priority for congressional Democrats in the 117th Congress. Envisioned as a “transformational anti-corruption and clean elections reform package,” the bill would enact sweeping changes to federal election laws along with important changes to federal campaign finance, lobbying, and government ethics laws. Taken together, these changes would have significant implications for private parties engaged in all manner of political activity.

After House Democrats relied on their slim majority to pass the For the People Act, the bill now faces more uncertain prospects in the evenly divided Senate. Nonetheless, Democratic leaders are sure to continue to press aggressively to move the bill through the upper chamber. Likewise, even absent passage of the entire package, Democrats may look for opportunities to pass key elements of the broader bill on a bipartisan basis.

To assist our clients in understanding how the For the People Act would affect their existing activity and compliance obligations, this alert is the first of several that will provide insights into key elements of the bill and what they mean. This alert addresses the bill’s proposed changes to the campaign finance rules, the greatest impact of which is new disclosure obligations for politically active corporations (including non-profit entities and for-profit companies) and trade associations. As discussed in this alert, the bill makes what should be only minor changes to the operation of most PACs, primarily in clarifying the bar on the participation of foreign nationals.

FEC Provides Short Webinar Training for Candidate Committees

By Robert Kelner and Robert Lenhard on Posted in Campaign Finance

The Federal Election Commission (“FEC”) is offering a 90-minute online training session on Wednesday, April 7th, for campaign committees that use FECFile to file their disclosure reports.  The purpose of this training is to address common filing problems and to provide answers to questions committees may have prior to their quarterly FEC filing.  FEC staff will demonstrate the FEC’s free electronic filing software and will be available to answer questions.  The cost to register is $30 and you can find our more and register here.  Registration is offered on a first-come, first-served basis.  These short trainings are valuable opportunities for candidates, and their staff, to stay up-to-date on FEC compliance related matters.

The Week Ahead in the European Parliament – Friday, March 5, 2021

By Sebastian Vos on Posted in EU Law and Regulatory

Next week will be a plenary week in the European Parliament.  Members of the European Parliament (“MEPs”) will gather virtually and in person in Brussels.  Several interesting votes and debates are scheduled to take place.

On Monday, the plenary will debate on the report of MEP Wolters (NL, S&D) on corporate due diligence and corporate accountability.  The report was adopted by the Parliament’s Committee on Legal Affairs (“JURI”) on January 27, 2021, with an overwhelming majority of 21 votes in favor with only one MEP voting against.  The report provides recommendations to the European Commission, which is drafting a legislative initiative on this matter.  Although the compromise report of JURI bares great resemblance to MEP Wolters’ first draft, it differs in a few key aspects.  For example, the report is softer on liability and enforcement and states that companies that can prove that they have taken all due care in line with the report to avoid harm cannot be held liable for adverse impacts occurring in their supply chains.  Also, the collective responsibility of the management bodies for ensuring compliance with the due diligence process has been struck.  A vote is scheduled for March 10, 2021.  The report tabled in plenary is available here.

On Tuesday, MEPs are set to adopt the novel EU4Health program, which must help EU health systems to prepare for future health threats.  With a budget of EUR 5.1 billion, the program will contribute to the resilience of healthcare in the EU.  Member State projects eligible for funding include those supporting health promotion and disease prevention, improving the accessibility and affordability of medicinal products and medical devices.  It will also strengthen the EU’s health systems by supporting its cross-border integration and coordinated work between Member States, including through advancing digital transformation with the creation of designated European “health data spaces.”  The EU4Health program is available here.

On Thursday, MEPs will have a questions and answers session with officials of the European Commission on the first evaluation of the Geo-Blocking Regulation 2018/302.  The Geo-Blocking Regulation prohibits online goods and services provider to refuse access to customers based on their geographical location in the EU.  The first evaluation report was published on November 30, 2020, and sees positive effects, although many traders continue to be reluctant to offer cross-border delivery options.  The Commission also notes that the effect of the Regulation can be better evaluated once the complete impact of the COVID-19 pandemic can be fully assessed.  MEPs will likely ask the Commission questions regarding the feasibility of extending the scope of the Regulation to include audiovisual content, as copyrighted material is now exempted.  The review clause of the Regulation requires the Commission to assess whether this Regulation should apply to services that offer access to copyright protected works, such as streaming services and other digital services in the EU.  The Geo-Blocking Regulation is available here.

For the complete agenda and overview of the meetings, please see here.

Financial Institutions and Congressional Investigations – 2020 into 2021

By Robert Kelner, Brian D. Smith, Angelle Smith Baugh and Brendan Parets on Posted in Congressional Investigations

Financial institutions are consistently targets of congressional oversight interest. In the last Congress, House and Senate committees held hearings with, demanded documents from, requested interviews with, and hosted briefings from a number of bank and non-bank financial institutions regarding a variety of issues. In a recent client alert, we looked at recent trends in congressional investigations of financial services companies and predict the future trajectory of investigations related to this industry.

Sustainability in Financial Services: The EU Sustainable Finance Disclosure Regulation and the Taxonomy Regulation

By Summreen Mahween on Posted in Compliance Issues, EU Law and Regulatory, Regulatory

A heightened focus on green finance and green investments has renewed legislative impetus, culminating in a series of regulatory developments across the European Union and more recently, the UK.  Some of these notable developments encompass green efforts by the Task Force on Climate-related Financial Disclosures; the European Non-Financial Reporting Directive 2014/95/EU; and the European Commission’s ongoing Sustainable Finance Action Plan.

At the end of December 2019, as part of a package of legislative reforms published by the European Commission (the “Commission”) in March 2018, the EU Regulation on sustainability-related disclosures in the financial services sector (Regulation (EU) 2019/2088) (the “Disclosure Regulation”) came into force, with most of its provisions due to take legal effect by March 2021.  The push comes as regulators worldwide seek to pacify investor concerns and “green” the financial services sector ensuing the rise of Environmental, Social and Governance (“ESG”) considerations.

Amongst various measures, the Commission has announced a Delegated Regulation amending MIFID II Delegated Regulation 2017/565 to integrate ESG considerations into investment advice and portfolio management, as well as a Regulation on the establishment of a framework to facilitate sustainable investment (Taxonomy Regulation (EU) 2020/852).  In particular, the Taxonomy Regulation introduces criteria for determining which economic activities can be considered environmentally sustainable, including by reference to climate change mitigation. It also introduces amendments to the Disclosure Regulation, which aims to standardise transparency measures on sustainability within the financial services sector. Amendments seek to impose additional requirements for ESG products with certain characteristics, as provided for under the Disclosure Regulation.

The Disclosure Regulation

Under Article 8 of the amended Disclosure Regulation, disclosure requirements apply to products that promote environmental or social characteristics, whilst disclosure requirements under Article 9 of the same apply to products that have sustainable investment as their objective. In effect, amendments to Articles 8 and 9 compel in-scope financial market participants to determine whether their products fall under the remit of either Article at an early stage, and to prepare for disclosures early on.

In-scope Financial Market Participants

Building on its package of reforms to prevent greenwashing (misleading stakeholders—usually via marketing—into believing that a company’s products are environmentally friendly) in the financial services sector, the Disclosure Regulation imposes transparency and disclosure requirements on financial market participants active in asset management, comprising AIFMs; UCITS managers; and firms falling under the remit of the MiFID I and MiFID II regimes.

These market participants are obliged to disclose information in relation to the integration of “sustainability risks” in investment and advisory decisions. The Disclosure Regulation defines a “sustainability risk” as “an environmental, social or governance event or condition that, if it occurs, could cause an actual or a potential material negative impact on the value of the investment.”

Disclosure Regime

When assessing the sustainability of a particular investment and making investment and advisory decisions, market participants covered by the Disclosure Regulation are required to take into account “sustainability factors”, defined as “environmental, social and employee matters, respect for human rights, anti‐corruption and anti‐bribery matters”.

More specifically, they must:

  1. Publish written policies on the integration of sustainability risks in investment decisions;
  2. Produce periodic reports with a consideration of principal adverse impacts of investment decisions on sustainability factors; including a statement on due diligence policies with respect to those impacts, taking account of their size, the nature and scale of their activities and the type of fund;
  3. Submit pre-contractual disclosures on how sustainability risks have been embedded across their businesses;
  4. Comply with pre-contractual transparency rules on sustainable investments; including regularly updating their websites with a clear explanation of any amendments to the published information;
  5. Publish an online description of the sustainable investments target and information on the methods used to assess, evaluate and monitor the efficacy of sustainable investments.

Implications

The Disclosure Regulation serves as a sea change in the regulatory landscape, requiring in-scope market participants to comply with a raft of transparency and disclosure measures geared towards sustainability. In doing so, the Commission’s legislative efforts strike a delicate balance in bolstering investor protection—reducing information asymmetries in principal‐agent relationships with respect to the integration of sustainability risks—without over-burdening market participants with onerous disclosure requirements.

An investment will only be deemed to be a “sustainable investment” if:

  1. It contributes to an environmental objective as measured, for example, by key resource efficiency indicators on the use of energy, renewable energy, raw materials, water and land, on the production of waste, and greenhouse gas emissions, or on its impact on biodiversity and the circular economy; or
  2. Contributes to a social objective, such as an investment that contributes to tackling inequality or facilitates social cohesion or social integration, or an investment in human capital or economically or socially disadvantaged communities,

provided that such investments do not significantly harm any of those objectives and that the investee companies follow good governance practices, in particular with respect to sound management structures, employee relations, remuneration of staff and tax compliance.

Practical Steps

A draft of more nuanced information (Technical Standards) to assist in-scope financial market participants was published on 4 February 2021. Although these Technical Standards  are not expected to come into force until 1 January 2022, they shed additional light as to the content and presentation of disclosures and periodic reporting.  They have now been submitted to the Commission for review, which is slated to take three months. If endorsed, the Commission must put the Technical Standards to the European Parliament and Council, who will take a position on the draft.  If there are no objections, the Technical Standards will enter into force on 1 January 2022.

In-scope financial market participants must act quickly to identify any products falling under Articles 8 and 9 of the Disclosure Regulation. Importantly, they should review all marketing materials as part of determining whether any products are caught by the amended disclosure requirements, and undertake any necessary revisions to these materials in the interests of transparency.

The UK also seeks to implement its own green taxonomy, using the EU Taxonomy Regulation as its foundation. A UK Green Technical Advisory Group has been set up to review the scientific metrics in the EU Taxonomy Regulation and to assess whether they are suited to the UK.  In order to support and benefit from the development of common international standards on taxonomies, the UK intends to join the International Platform on Sustainable Finance.

The Week Ahead in the European Parliament – Friday, February 26, 2021

By Sebastian Vos on Posted in EU Law and Regulatory

Next week will be a mixed week of committee and political groups meetings in the European Parliament.  Members of the European Parliament (“MEPs”) will gather virtually and in person in Brussels.  Several interesting votes and debates are scheduled to take place.

On Thursday, the MEPs of the Committee on Economic and Monetary Affairs (“ECON”) will likely vote to adopt a report on the international role of the euro, in light of the European Commission’s recent Communication on the same subject.  In general, the rapport by MEP Danuta Hübner (PL, EPP) echoes the communication of the Commission to a very large degree – even though the Rapporteur’s mandate to draft the own-initiative report predates the Commission’s Communication.  It repeats many of the points of interests raised by the Commission, but also highlights, for example, the pre-condition of a large pool of safe assets dominated in euros for the euro to grow its status as an international currency.  The Rapporteur, therefore, underlines the need for more European safe assets and considers that the common debt that finances NGEU, the EU’s COVID-19 recovery fund, will provide for an EU-level reserve asset benchmark.  The report also expects that the ECB will assess whether it is possible to issue certificates of deposit under the existing legal basis.  However, in contrast to the Commission’s Communication, the draft report dedicates little attention to the matter of international sanctions and the role of the euro.  The draft rapport is available here.  The Commission’s Communication is available here.

On the same day, the MEPs of the Committee on Employment and Social Affairs (“EMPL”) will debate on a draft report on “fair working conditions, rights and social protection for platform workers.”  After describing the employment situation of platform workers, Rapporteur Brunet (FR, RE) concludes that the current European framework is “unsatisfactory.”  She attributes many of the shortcomings in the framework to the fragmentation and lack of uniform definitions of “worker” and “self-employed” in the Member States.  The Rapporteur calls on the Commission to introduce a new Directive on platform workers in order to guarantee them a minimum set of benefits that are tailored to the specificities of platform work.  In particular, she would like the Commission to explore several options, including: (i) ensuring that all platform workers are allowed to and not obstructed to work for multiple platforms at the same time; (ii) ensuring all platform workers are given a reasoned statement and right of reply in the case of their suspension or termination by the platform; and (iii) providing more transparency regarding working conditions, fees and their reward methodology.  Furthermore, the Rapporteur believes that any Directive on platform workers should enable and guarantee them rights to collective bargaining etc.  The draft report is available here.

For the complete agenda and overview of the meetings, please see here.

EU Cloud Initiatives in 2021 and 2022

By Dan Cooper, Sebastian Vos, Bart Szewczyk and Anna Oberschelp de Meneses on Posted in EU Law and Regulatory

For the European Union, data is a core priority for economic growth, whether to facilitate personalized medicine or autonomous vehicles.  Between 2018 and 2025, the value of the data economy in Europe is projected to nearly triple, from €301 billion to €829 billion, and the number of data professionals is expected to nearly double. Given that the size of data is forecasted to grow fivefold during this time period, cloud services are central to extracting economic value from data by storing and sharing it. If data is the new oil, cloud services are the wells, rigs, and pipelines fueling the digital economy.

To maximize opportunity from this wider digital transformation, the Commission adopted last year a strategy for data (see our previous post), including cloud services.  Below, we list several cloud initiatives planned for 2021 and 2022, as the EU is expected to rebound from the Covid-19 pandemic at nearly 4% GDP growth per year (approximately twice its historical average). As some European officials have noted, the full value of data is still an open and evolving concept and can fluctuate even more than oil prices. Likewise, the rules and standards that should apply to cloud services are an open policy field, where the European Commission and EU Member States have not made ultimate decisions and require complex analysis and input from the industry and other stakeholders.

The privacy and public policy team at Covington will keep monitoring any further initiatives in this space and identify engagement opportunities to help shape the emerging policies.

  • EU Cloud Federation

In the first quarter of 2021, the European Commission, together with Member States, will create a European Alliance on Industrial Data and Cloud.  The purpose of this alliance is to develop an EU Cloud Rulebook that will include self-regulatory norms and standards regarding security, energy-efficiency, data protection, interoperability and fair competition.  The Alliance will be composed of representatives from Member States, cloud computing providers and industrial cloud users and should mobilize up to €10 billion for the creation of a European Federated Cloud.

In October 2020, the EU Member States signed a declaration to build the next generation cloud for businesses and the public sector in the EU, a so-called EU Cloud Federation.  The European Federated Cloud is meant to be a set of joint technical solutions and policy norms in order to foster EU cloud services that are interoperable across Europe.  These technical solutions and policy norms should offer a high standard in terms of data protection, cybersecurity, data portability/reversibility, interoperability, transparency, openness, energy efficiency, performance and reliability.

  • Cloud Certification Scheme

In December 2020, ENISA launched a public consultation on a new draft candidate cybersecurity certification scheme (“EUCS”) in a move to enhance trust in cloud services across Europe.  The consultation was open until February 7, 2021. The draft EUCS is a voluntary program that will offer certificates valid across the EU for 3 years (with the possibility of renewal).  It is applicable for all kinds of cloud services and covers three assurance levels: “Basic,” “Substantial,” and “High.”

  • Data Space Initiatives

In the next five years, the European Commission intends to fund the establishment of EU-wide common, interoperable data spaces in strategic sectors, which will operate on cloud services. In November 2020, the European Commission proposed a Regulation on European Data Governance (see our prior blog post), which aims to facilitate data sharing across the EU and between sectors.  The draft regulation will now be debated and negotiated by the European Parliament and the Council of Ministers. The Commission also noted that more specific proposals on European data spaces are expected in 2021, and will be complemented by a Data Act to foster business-to-business and business-to-government data sharing.

In parallel, the European Commission published in December 2020 its inception impact assessment of policy options to establish a European Health Data Space (“EHDS”).  The EHDS will provide a common framework across EU Member States for the sharing and exchange of quality health data (such as electronic health records, patient registries and genomic data) throughout the EU (see our prior blog post).  In addition to the consultation on the inception impact assessment, the Commission proposes to organize several targeted consultation activities and events with stakeholders regarding the EHDS in 2021.

  • EU Data Protection Code of Conduct for Cloud Service Providers

Within the next couple of years, the Cloud Select Industry Group hopes to receive the European Data Protection Board’s approval of the EU Cloud Code of Conduct.  The code aims to set requirements and recommends procedures to raise the level of data protection in cloud services. In September 2020, the EU Cloud Code of Conduct General Assembly announced that they would add to the code a module on data transfers.  The Assembly hopes that the code can be used as an approved transfer mechanism and as an alternative to other transfer mechanisms such as standard contractual clauses.

  • Codes of Conduct on data portability and cloud switching

Before November 2022, the European Commission will evaluate the two codes of conduct on data portability in the cloud prepared by the working group on switching cloud providers and data porting (“SWIPO”): one for “infrastructure-as-a-service” and another for “software-as-a-service.”  The objective of the SWIPO Codes of Conduct is to reduce the risk of vendor lock-in by cloud service providers and allow end-users to easily switch cloud services.

  • European Open Science Cloud

In 2021, the Commission aims to establish a common framework for managing user identity and access and will put together standards, tools and services allowing researchers to find, access and reuse results stored in the European Open Science Cloud (“EOSC”). The EOSC is an environment for hosting and processing research data to support EU science.  It aims to develop a trusted, virtual, federated environment that cuts across borders and scientific disciplines to store, share, process and re-use research digital objects (such as publications, data and software) following FAIR principles.

  • Gaia X

In the first semester of 2021, Gaia-X aims to release the first European cloud products and solutions based on its framework.  Gaia-X is a project that aims to develop common framework for a European data infrastructure and create a consortium between public and private companies.  It counts with more than 300 members, amongst them many European and multinational companies.  GAIA-X aims to identify the minimum technical requirements and services necessary to operate the federated GAIA-X Ecosystem that respects the principles of Security by Design and Privacy by Design.

California Increases Campaign Contribution Limits, Applies Limits to Local Elections

By Elizabeth Upton on Posted in Campaign Finance

The California Fair Political Practices Commission (FPPC) has published contribution limits for 2021-2022.  The new “per election” limits are effective for the 2021-2022 election cycle, and the calendar year limits are effective January 1, 2021.  Note in particular that this year, for the first time, the state has imposed limits on contributions in city and county elections if the locality does not otherwise have its own contribution limits.

The amount an individual, business entity, or committee/PAC can contribute to a city, county or state candidate was increased to $4,900 per election, up from $4,700.  Because the primary and general count as separate elections, individuals may generally give $9,800 per candidate per cycle.  The limit on contributions from an individual, business entity, or committee/PAC to a candidate for governor also increased from $31,000 to $32,400 per year.  The contribution limit for PACs that contribute to state candidates increased from $7,800 to $8,100 per calendar year; some committees also have a separate, restricted account that may accept contributions in unlimited amounts for purposes other than contributing to candidates.

The following chart shows more details on the limits for individuals in 2021 and 2022:

An individual, business entity, or committee/PAC may contribute to…

Governor $32,400 per election
Lt. Governor, Secretary of State, Attorney General, Treasurer, Controller, Supt. of Public Instruction, Insurance Commissioner, and Board of Equalization $8,100 per election
Senate and Assembly $4,900 per election
City and County Candidates if no locally enacted limit* $4,900 per election
CalPERS/CalSTRS $4,900 per election
Committee (PAC), other than a Political Party, that Contributes to State Candidates $8,100 per calendar year
Political Party Account for State Candidates $40,500 per calendar year
Small Contributor Committee $200 per calendar year
Committee Account NOT for State Candidates (Ballot Measure, PAC, Political Party) No Limit per calendar year

* This state contribution limit applies by default to city and county candidates when the city or county has not enacted laws addressing contribution limits on such candidates.

Note that the amount and permissibility of contributions to California state and local candidates may be affected by factors other than the limits above, including contributions by the contributor’s affiliated individuals and entities; the contributor’s lobbying activity; and the contributor’s state contracting activity.  California also has a variety of disclosure requirements for contributors and lobbyists that should be reviewed and considered before making a contribution.

Gift Limits

The FPPC has also published a gift limit increase.  For 2021-2022, state and local officials and employees are prohibited from receiving a gift or gifts totaling more than $520 in a calendar year from certain sources, up from $500.  The lobbyist gift limit is not subject to inflationary increases and remains at $10.  Covered gifts vary by official and other considerations.  Consult with counsel before providing anything of value to a government official or making political contributions.

Senator Grassley and Senior DOJ Official Discuss Potential False Claims Act Changes and Enforcement Priorities

By Terra White Fulham, Michael Wagner and Peter B. Hutt II on Posted in Congressional Action, Uncategorized

On February 17, 2021, Senator Chuck Grassley (R-IA) and Brian Boynton, Acting Attorney General for the Department of Justice’s Civil Division, provided opening remarks at the Federal Bar Association’s annual Qui Tam Conference. Both emphasized the key role of the FCA in combating fraud against the Government, and noted an anticipated increase in FCA enforcement actions in the coming years, particularly related to the Government’s pandemic response. In addition, Senator Grassley offered a preview of potential legislative changes to the False Claims Act, and Boynton outlined DOJ’s enforcement priorities for the coming year.

Senator Grassley Signals Potential Legislative Changes to the FCA In his prepared remarks, Senator Grassley, an architect of the 1986 and 2009 amendments to the False Claims Act, signaled that changes to the False Claims Act may be on the horizon. He confirmed that he is drafting legislation to overturn what he described as attempts by the courts and the DOJ to “undermine the law as written.” Senator Grassley highlighted two areas of focus for potential legislative action, both of which would benefit qui tam relators.

First, Senator Grassley indicated a potential change to the materiality standard under the FCA. During a Q&A session, he acknowledged that materiality is “very, very important” and necessary to “prevent parasitic lawsuits.” Yet, while not referencing the case directly, Senator Grassley took aim at the Supreme Court’s 2016 decision in Escobar and its progeny, stating that courts have “read into the law a more stringent materiality standard than was originally intended” over the past several years. In particular, Senator Grassley stated that he wants to ensure that courts cannot dismiss cases on materiality grounds “just because somebody working in the government is aware of [the non-compliance or falsity of the claim] and continues to pay.” Although he did not provide any detail on proposed amendments to the materiality standard, Senator Grassley’s view appears directed at the Supreme Court’s opinion in Escobar, which explained that the Government’s “pay[ment] of a particular claim in full despite its actual knowledge that certain requirements were violated” is “very strong evidence that those requirements are not material.” Since Escobar, courts in a variety of circuits have dismissed FCA claims based, in part, on the Government’s continued payment after notification that certain requirements were violated.

Second, Senator Grassley criticized DOJ’s interpretation of its authority to dismiss qui tam suits. Following the issuance of the 2018 Granston Memo, the number of non-intervened qui tam cases that DOJ has sought to dismiss has increased from prior years (though the number of such dismissals relative to qui tam suits filed remains very low). Senator Grassley suggested that DOJ has dismissed cases under an “incorrect interpretation” of the FCA that it has “unfettered” discretion to dismiss qui tam cases. While acknowledging that the DOJ is within its rights to seek dismissal if a case “lacks merit,” Senator Grassley suggested that potential new legislation would impose a higher standard on DOJ when seeking dismissals of qui tam lawsuits. Without providing specifics, Senator Grassley asserted the Attorney General should have to “provide evidence in a court of law” and “state legitimate reasons for deciding not to pursue” qui tam claims.

Senator Grassley noted that he intended to include language making any legislative changes to the FCA retroactive so as to ensure coverage of pending cases and cases on appeal, consistent with the approach used in the 2009 amendments to the Act.

There is, however, one aspect of the FCA that Senator Grassley made clear he does not intend to change. During a Q&A session following his opening remarks, Senator Grassley was asked for his opinion on the addition of language to limit FCA penalties to ensure they are not disproportionate or excessive. He rejected this notion, stating he does not want to “change those [penalties] at all,” and remarking that the Government must “come down with a sledgehammer, not a toothpick” in response to fraud.

Boynton Highlights DOJ’s FCA Enforcement Priorities

 In his prepared remarks, Boynton outlined six priority areas for the Civil Division’s FCA enforcement in the coming year. First, unsurprisingly, fraud relating to the government’s pandemic response is expected to be a key priority in the coming year. Boynton noted that DOJ recently obtained its first FCA settlement for fraud on the CARES Act Paycheck Protection Program, and that more will undoubtedly follow. Boynton expects that the government’s significant pandemic spending will translate to significant cases and recoveries in the coming years.

In addition to fraud related to the COVID-19 pandemic, Boynton highlighted the following enforcement priorities: fraud related to the opioid crisis; fraud directed toward senior citizens, particularly schemes to provide poor or unnecessary health care to seniors; fraud relating to electronic health records; fraud relating to telehealth schemes; and cybersecurity-related fraud.

Boynton’s comments on the latter category are consistent with December 2020 remarks from Deputy Assistant Attorney General Michael Granston, in which he specifically identified “cybersecurity related fraud” as an “area where we could see enhanced False Claims Act activity.” We recently analyzed the efforts of the Government and qui tam relators to use the FCA to enforce alleged cybersecurity noncompliance.

Boynton also discussed the Civil Division’s increased use of sophisticated data analytics to identify fraudulent schemes and analyze qui tam claims. These techniques have largely been used in the health care context to date (e.g., through analysis of Medicare data). But Boynton expects the Civil Division’s use of data analytics to expand to combat other types of fraud, including misconduct related to the pandemic response.

The Week Ahead in the European Parliament – Friday, February 19, 2021

By Sebastian Vos on Posted in EU Law and Regulatory

Next week will be a committee week in the European Parliament.  Members of the European Parliament (“MEPs”) will gather virtually and in person in Brussels.  Several interesting votes and debates are scheduled to take place.

On Monday, the European Parliament will host an inter-parliamentary conference on economic stability, coordination and governance in the EU.  The conference will focus on the fiscal, budgetary and social challenges that may hinder a full recovery after the pandemic.  Among the speakers are not only EU officials of the highest political and executive level, but also the Secretary General of the UN, Antonio Guterres, and Managing Director of the IMF, Kristalina Georgieva.  Separate panel discussions will cover the fiscal priorities in national recovery and resilience plans, their governance, and their synergies with the European Green Deal.  A full program is available here.

On Tuesday, the MEPs of the Committee on Economic and Monetary Affairs (“ECON”) will have an exchange of views with Mr. Steven Maijoor, Chair of the European Securities and Markets Authority (“ESMA”), and Mr. Ugo Bassi, the European Commission’s Director for Financial Markets.  They will discuss the recent GameStop trading frenzy and related events on U.S. financial markets.  On February 17, 2021, ESMA published a statement on the “concerted action by some retail investors, based on information shared on social media,” and warned that it cannot be excluded that similar situations could occur in the EU.  While ESMA welcomed the increased participation of retail investors, it simultaneously cautioned retail investors not to make investment decisions purely based on information from social media.  It stressed that although sharing opportunities to buy or sell shares online does not account for market abuse, coordinated strategies to move a share’s price could constitute market manipulation under certain circumstances.  MEPs will debate how retail investor participation fits into the EU’s Capital Markets Union Action Plan and whether any EU-level regulation should follow.  ESMA’s statement is available here.  The Capital Markets Union Action Plan is available here.

On Wednesday, MEPs of the Committee on International Trade (“INTA”) will have a debate with Executive Vice-President of the European Commission Valdis Dombrovskis on the EU Trade Policy Review, which was adopted by the Commission on February 18, 2021.  With a renewed trade policy, the Commission intends to pursue its “open strategic autonomy” and support the green and digital transitions.  The strategy prioritizes reforming the World Trade Organization to work towards global commitments on trade and climate; digital trade; stricter rules on competitive distortions; and restoring the functioning of the Appellate Body of the WTO’s dispute settlement mechanism.  The EU also means to take a more “assertive approach” to implementing and enforcing trade commitments.  The newly appointed Chief Trade Enforcement Officer will revert to all existing instruments and seek to expand its toolbox by implementing, for example, the recently adopted amendments that modernize the Export Control Regulation and Enforcement Regulation.  The EU Trade Policy Review is available here.

For the complete agenda and overview of the meetings, please see here.

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