Consistent with popular predictions and our prior posts, Congress made drug pricing a key item on its investigative agenda in the first year of the 116th Congress. Several factors contributed to the uptick in congressional drug pricing oversight activity, including the elevation of new Democratic chairs in the House
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New Changes to Foreign Agents Registration Act Forms and E-File System
Following the Department of Justice’s announcement in March of an initiative to increase enforcement of the Foreign Agents Registration Act (“FARA”), the Department has rolled out a new e-file system for FARA registrations. Notably, the new system only applies to new registrants, although the Department indicated that it will transition
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Florida FARA Case Leaves Troubling Precedent
RM Broadcasting buys and sells radio airtime, including from WZHF 1390 AM in Washington, D.C. In late 2017, RM entered into a services agreement to provide for the broadcasting and transmission of Rossiya Segodnya’s radio programs over WZHF. Notably, RM agreed to sell essentially the entire broadcast schedule on WZHF, except for hourly station identifications, and to transmit Rossiya Segodnya’s programming in whole and unaltered. In June 2018, the FARA Unit informed RM that the government concluded the company was required to register under FARA. RM disagreed and brought an action for a declaratory judgment that it was not required to register.
RM raised a number of arguments that the Court found inapplicable or unpersuasive. For example, RM argued that its services agreement did not give rise to an agency relationship under common law principal-agent theories. Unfortunately, there is very clear precedent that FARA’s “agent of a foreign principal” is a statutory test that is wholly distinct from common law agency. RM also argued that it was not broadcasting radio programs because the FCC licensee – from which RM bought airtime – did the actual broadcasting. FARA, however, covers actions of an agent taken “directly or indirectly,” and the agreement required RM to provide broadcasting services to Rossiya Segodnya, which it did.
From a FARA perspective, RM failed to raise directly perhaps its strongest argument: the commercial exemptions to FARA. Although RM made arguments that alluded to the commercial exemptions, such as stating that it simply buys and sells radio airtime in “an arms-length commercial business transaction,” it raised these issues in the context of its alleged agency relationship with Rossiya Segodnya, rather than as an exemption to registration. RM never specifically cited and explained the commercial exemptions to FARA, their history and purpose, or the reasons that the exemptions could preclude registration. The Department of Justice, which had no incentive to help RM strengthen its case, also failed to address the commercial exemptions in its briefs. As a result, the Court’s opinion did not address these critically important issues.
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Congressional Investigations and the Rules of the 116th Congress
With Congress heavily engaged in launching and pursuing new congressional investigations, particularly since the Democratic takeover of the House of Representatives, many of our clients have questions regarding the rules that govern congressional investigations. While many aspects of congressional investigations are not subject to any rules at all, the House,
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Congressional Investigations After the Midterm Elections
Brian Smith delivered the following remarks during Covington’s post-election conference call with clients on November 8, 2018.
“Restoring the Constitution’s checks and balances to the Trump administration.” That’s what Democratic leader Nancy Pelosi promised in her speech after the elections.
Congressional oversight and investigations thrive in divided government, and Democratic leaders are already promising a new wave of oversight.
While the press and pundits are mostly focused on the likely political investigations – access to the President’s tax returns or investigations of the Trump Organization’s business activities – the House’s investigative agenda is much broader, and it has direct implications for many of our clients.
For example, when we last had a Democratic House and a Republican President, in 2007 and 2008, Congress conducted large investigations of drug companies’ sales and marketing practices, technology companies’ sharing of customer data, and the financial industry’s corporate practices. A decade later, these three sectors – pharmaceutical, financial services, and technology – remain prime targets for congressional scrutiny, along with energy, government contractors, and most other highly regulated industries.
Moreover, a lot has changed in the last decade to increase the congressional investigations risks.
First, more committees now possess dedicated and experienced oversight staff than ever before, and several committees have dedicated oversight and investigations subcommittees. We expect oversight activities from all the major committees next year.
Second, in recent years, several committees have modified their rules to give the chairmen unilateral authority to issue subpoenas – a practice that we expect to continue next year. Even though many investigations do not result in subpoenas, the potent threat of a subpoena – issued without committee vote or sometimes even notice – makes it much harder for companies to resist congressional demands.
Third, congressional investigations, which always ebb and flow depending on the political environment, have become much more consistent and a mainstay of today’s legislative process.
That trend has been driven, in part, by legislative gridlock, as Members turn to oversight and investigations as a way to affect policy, and private sector practices, that they cannot reach through legislation. With the Senate remaining in Republican control, House Members will have a greater incentive to pursue policy goals through investigations.
In predicting next year’s investigations, history is often a good guide.Continue Reading Congressional Investigations After the Midterm Elections
Are You Ready For Your Congressional Investigation?
If the current polls and predictions are accurate, the Democratic party is poised to take control of the House of Representatives next year, for the first time since 2010. Congressional investigations thrive in divided government, and Democratic leaders in Congress are already promising a new wave of investigations.
My new
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New Wave of Trade Lobbying Presents FARA Registration Concerns
The Foreign Agents Registration Act (“FARA”): A Guide for the Perplexed
House of Representatives Seeks to Strengthen Subpoena Enforcement Dramatically
In late October, the House of Representatives quietly approved a bill that would dramatically strengthen Congress’s procedures for enforcing congressional subpoenas. In adopting the bill, the bipartisan leadership of the House Judiciary Committee highlighted the challenges that Congress faces in obtaining materials from executive branch agencies. Significant portions of the
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Grassley Legislation Would (Re)Impose FARA Obligations on Private Sector Entities
With the Foreign Agents Registration Act in the news and public awareness of this formerly obscure statute at an all-time high, Senator Charles Grassley (R-Iowa) introduced legislation last week to revise the statute significantly, including reversing a decision Congress made in 1995 to remove most private sector reporting from FARA
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