Congressional investigations are now a common reality across corporate America, and companies large and small are therefore more focused than ever on the potential effects of congressional inquiries into business activities, goals, and strategies. In this new reality, the most sophisticated companies, private equity firms, and other corporate players are adding congressional investigations and other political risk diligence into existing procedures for assessing mergers, acquisitions, asset purchases, joint ventures, new product launches, and other major business actions.
In this alert, we describe the general risks associated with congressional investigations, as well as the particular ways in which transactions and other business strategies can draw the attention of investigators on Capitol Hill. From there, we highlight strategies and best practices for integrating consideration of these risks into existing due diligence, including key questions to ask and documents to collect to evaluate potential congressional investigations risk as part of an effective diligence process.