Preparing for a Congressional Investigation of Your Company

Sue Reisinger

Corporate Counsel

01-28-2013

When federal prosecutors investigate a company, corporate executives tend to react instinctively by “hunkering down.” But a congressional investigation requires the exact opposite behavior, attorney Michael Bopp told an audience on Friday.

“Here on the outside and when I was on the [Capitol] Hill, the general mindset is, ‘Let’s not engage with Hill investigators,’ ” said Bopp, a former chief counsel of the Senate Committee of Homeland Security and Governmental Affairs, and now a partner at Gibson, Dunn & Crutcher.

But Bopp, who led a webinar entitled “Congressional Investigations 2013: How to Prepare for the Investigative Agenda in the New Year,” said the wiser course is to cooperate in private with committee investigations and hope that the panel will not drag you into a public hearing to ask more questions.

Robert Borden, general counsel of the House Committee on Oversight and Government Reform, agreed with Bopp.

“We’re not looking for civil or criminal liability,” said Borden, an 18-year veteran on the Hill. “So it’s useful to engage us and find out what we want. We are always open to finding an amicable solution that gets us the information we want, without threatening to get subpoenas and hold hearings.”

Borden added, “I wouldn’t discourage someone from even explicitly asking, ‘What can I do other than testify?’ We’ll have a response to that.”

Bopp and Borden joined F. Joseph Warin, a former assistant U.S. attorney and chair of Gibson’s white-collar defense and investigations practice, during the law firm’s webinar.

Among other tips, the group said it’s not smart to challenge a committee’s jurisdiction. All committees have wide jurisdictional authority, and challenges are usually fruitless and irritating to Congress members, they said.

But Bopp, who chairs Gibson’s financial services crisis team, said it can still be worthwhile to ask the committee’s staff to articulate what the legislative purpose is behind the investigation. “Later, you can come back and ask how is this document going to help you” accomplish that purpose, he said.

Warin noted that most enforcement investigators are reluctant to talk openly about the aim of their investigations, and asked Borden about congressional probers.

“Never expect an investigator to tell you everything they know and everything they’re looking for,” Borden replied, but added that even so, “very often we are open to having that dialogue.”
 
Bopp also suggested that a corporate lawyer should “know the landscape” and pay attention to letterheads. For example, he said three congressmen set out to delve into health issues related to energy drinks. They sent out a “voluminous document request” on U.S. Congress—not specific committee—letterhead.

The point is that individual congressmen do not have the same authority as a committee, such as the power of subpoena or deposition of a witness. So the information request was strictly voluntary.

“It doesn’t mean you should ignore them,” Bopp said, “but know who you are dealing with and what their authority is.”

Different committees have different authority as well. Some require a vote of the committee to serve a subpoena, others don’t. Some have staff deposition authority, while others will not.

Bopp noted that almost all committees or subcommittees have investigative units.

And Borden explained that the units coordinate with each other. For example, Borden said he knows the investigators on other committees well, has their phone numbers, and “we talk to them on a fairly regular basis.”

“We always feel that working with another committee gives us that much more leverage, and the same goes with working across the aisle,” with the other political party, he added.

But Bopp said a company should not assume there is cooperation or even communication between committees.

Borden agreed. “One of the tools you have and can use strategically is when there are multiple committees investigating the same matter,” he said. “There are opportunities for you to share information that other committees may not know, and that can be to your advantage.”

Warin observed that attorney-client privilege comes up in almost every investigation.

Borden said the House does not recognize common law privileges and has not been inclined to formally recognize attorney-client privilege, especially when investigating a government agency.

“But if someone in the private sector raises the privilege, we will always take a serious look at it, and we’ll weigh what we need to find out” against the potential harm. “It would be rare that we insist to a private sector entity that we want to breach attorney-client privilege,” Borden added.

Warin asked how the committee decides to hold a hearing as opposed to just take testimony privately.

“There’s no black-and-white guidance,” Borden answered. “We have a hearing when we have a story we want to tell, usually at the end of an investigation. Or when an investigation may need some life breathed into it, we may bring in one high-profile witness to get others” to come forward.

He also explained why a committee often requests the chief executive or president of a corporation to appear at a hearing.

“You’re looking for a lot of attention, and the higher-ranking person will bring more attention,” he said. “Plus, we don’t like to bring in someone to say, ‘Oh, that’s not my department.’ If you have the CEO, they don’t have that excuse.”