Big Law Readies for Oversight Payday

The halls of power are preparing for the possibility that the Democrats are serious about combating corporate corruption, one of the four pillars on the agenda of incoming House Oversight Committee chair Rep. Robert Garcia (D-CA). BigLaw has been gearing up for months, building out their congressional investigations practices and talking their book to potential new clients on Wall Street. Garcia’s two-word warning to targets of his impending investigations—“Lawyer up”—has become the best ad copy corporate defense firms could ever write.

Law firms have reached out to companies in health care, pharma, energy, crypto, and defense manufacturing––all industries that cut deals, won federal contracts, loans, equity, or tariff exemptions, or sought influence otherwise with the Trump administration. They have also been targeting business with donors to the White House’s construction projects, which have raked in hundreds of millions of dollars from individuals and companies including Amazon, Microsoft, T-Mobile, and Caterpillar. Congressional Democrats will not necessarily need the White House to comply to inflict “legal … political, reputational, and financial” pain on the private sector, per Quinn Emanuel’s AJ Merton, who has served as counsel for Donald Trump Jr.’s venture capital firm.

Meanwhile, some CEOs who made high-profile alliances with the president, like Palantir’s Alex Karp, have begun to publicly rebrand for the realignment of power in the capital. “I’ve been a Democrat my whole life,” Karp told Politico this week. Two weeks before the election, Meta’s top lobbyist, Joel Kaplan, who had been a key link to the Republicans, left the company.

“I think everybody understood, and it’s not a secret in D.C., that if the Democrats took back the House and the Senate, congressional oversight would ramp up considerably,” said Brian Kidd, a D.C. partner at Sher Tremonte and former chief in the Justice Department’s Criminal Fraud division. “I think people have been talking about that for six months, if not longer, so this is not a secret.”

Those persistent conversations on K Street evinced a conclusion that the whole of American society seems to have come to: that the last two years have been truly exceptional for the brazenness and scale of profiteering by corporations, private individuals, and government officials. The Trump administration had itself telegraphed its expectation that the midterms would serve as a rebuke of that behavior and has already taken steps to cover its tracks.

In August, the Office of Legal Counsel, which serves as the nexus of executive branch interpretation of the law, issued an opinion extending immunity to communications between the president and his aides and their “private advisers,” in an attempt to preemptively shield the myriad figures from corporate America who made unofficial inroads with the White House and the cabinet. Congressional Democrats pounced on the memo shortly after, excoriating the White House for instituting a policy of “improperly withholding documents and instructing private individuals and non-governmental advisers to defy lawful congressional subpoenas and oversight inquiries, now and in the future.”

Analysts expect the legality of the order to be tested once congressional committees begin printing and serving subpoenas in the new year. The White House’s head lawyer, Will Scharf, meanwhile, has taken further steps to stave off congressional oversight, threatening criminal investigations of members of Congress who pursue documents or testimony from the president’s inner circle.

Congressional Democrats so far appear unfazed: They’ve begun hiring “anti-corruption” lawyers and investigators at the Senate Homeland Security and Governmental Affairs Committee, whose chair is empowered to issue “unilateral” subpoenas “with jurisdiction over all government agencies and departments” and even “intergovernmental relations,” without needing sign-off from the Republicans.

What the Democrats will do with that power is still an open question. “One thing that I’ve learned is that windows of opportunity are short and hotly contested, and it’s really easy to miss them,” said Sarah Chayes, an expert on global corruption and the author of On Corruption in America. “When I was advising folks thinking about anti-corruption efforts in developing countries … [what] I would say is, first you want to map the terrain, map the networks, and figure out how are they structured. What elements of state function have they captured or distorted or, you know, bent to their purposes … Now, a lot of that in the Trump administration is in plain sight. However, if you really wanted to get serious about addressing the structural underpinnings that Trump has capitalized on, you might want to do this really serious analysis of the situation in the United States.”

One thing is clear: Democrats see the task of cleaning up corruption as inextricably linked to the task of making the country more affordable, a theme they successfully pounded during the campaign. “So many people in the media are asking whether we’re going to pursue affordability questions and economic questions or we’re going to investigate corruption and do oversight,” said incoming House Judiciary Committee chair Jamie Raskin at Popular Mandate, a conference organized this week by Groundwork Collaborative, a progressive think tank. “These are the exact same thing basically. We can give you dozens of examples of ways in which all of the corruption, the pay-to-play … are making life unaffordably expensive for the American people.”

“Like antitrust law, they have turned that into quid pro quo corruption. If you show up to … the Department of Justice with enough money, you will win in your antitrust action,” Raskin continued. On tariffs, he said, “A lot of businesses show up in the Oval Office and they say ‘Oh, we love your idea, it’s a great idea except it doesn’t really work in our business … and by the way we’re happy to give $10 million for this or that slush fund.’”

When they were in a similar position in 2007 and 2019, Democrats held landmark hearings exposing presidential corruption and corporate malfeasance, which did help map the terrain of backsliding norms and corrosive activity. In the 2007-2009 Congress, they investigated the Bush administration for summarily firing nine assistant U.S. attorneys. (Quaint, no?) They scrutinized the U.S. military’s relationship with the “shoot first” private security contractor formerly known as Blackwater, which they discovered had massacred dozens of Iraqi civilians, and examined wasteful spending by other federal contractors tasked with the reconstruction of the country. When the U.S. economy melted down, they grilled Lehman bankers on the firm’s near-trillion-dollar (adjusted for inflation) debt binge and smoke-and-mirrors accounting.

A decade later, Democrats focused on Russian election interference and efforts by the Trump administration to coerce the Ukrainian government into publicly opening an investigation into the Biden family in exchange for $400 million in military aid. (Again: quaint.) On the House Antitrust Committee, led by a staff investigator named Lina Khan, they laced into Big Tech in blockbuster hearings, which yielded substantial reports, based on millions of pages of internal corporate documents collected through subpoenas, and generated lawsuits, though those have mostly been swatted away by the courts. And they exposed a catalog of anti-competitive, cost-raising practices by Big Pharma and third-party pharmacy benefit managers (PBMs), paving the way for the Inflation Reduction Act’s enabling of Medicare administrators to negotiate the price of the most expensive drugs down directly with manufacturers, plus voluntary insulin price cuts by prominent drug companies and regulatory actions against the major PBMs. The Prospect recently covered how those enforcement efforts have mostly produced surface-level changes to business as usual.

The last two years flushed that oversight work down the drain, as the administration retreated from regulatory enforcement, failed to pass major legislation aside from a tax cut, courted money from the private sector for vanity projects, engaged in self-enrichment schemes, and cut deals with companies in the dark, wielding the immense authority of the president over trade and supply chains to move markets.

The midterms have given some indication of how the electorate has processed all this. “We now see people able to make connections between corruption and their daily lives,” said Gary Kalman, a lead proponent of the Corporate Transparency Act who now leads Transparency International’s U.S. arm. “So that is, I think, a breakthrough that is extremely helpful if we’re going to be able to then address this problem going forward.”

But there is one caveat. When asked which party they believed was best suited to cleaning house and beating back corruption, voters, who supported Democratic congressional candidates by a 13-point margin nationwide, gave the edge to the Democrats over the GOP by a smaller berth, 37-to-30. Nearly as many voters, fatigued perhaps by the last 20 years of promises, said they believed neither party was up to the task, which, most seem to agree, is enormous.

The very visible, very partisan bargain the private sector made with the Trump administration has made the politics a whole lot easier for the Democrats, who should have little doubt about the allegiances of the price-fixing industries they’ve been given a mandate to tame. It remains to be seen whether they’ll have the fortitude to break up the system, and maintain the confidence of the public that they won’t use its spoils for themselves.