By Jeffrey H. Birnbaum
Monday, December 11, 2006
Deee-fense, Deee-fense Deee-fense.
You can almost hear the chant rising from corporate offices all over town. As soon as Democrats take over Congress next month, all sorts of businesses will no doubt face sharp-elbowed congressional hearings called O & I -- oversight and investigations. And they'll need a strong defense.
Luckily for corporate America, many of the people who formerly conducted those nasty and frequently televised inquiries have switched sides and are available for hire to the highest bidders. For the right fee, a company can retain a former chief counsel to almost any of the most marauding committees on Capitol Hill.
Think of it as a cottage industry, and a very large cottage at that.
So many inquisitions are about to be begun by the Democrats newly in charge that dozens of law and PR firms are bulking up with former insiders to cash in on all the trouble those hearings will create. Companies that were harassed in the past by smart young government lawyers have lately been buying the services of those same young lawyers, now in the private sector, for protection from their successors.
"A lot of companies are reaching out to law firms and lobbying shops because they're nervous about what's ahead," said Mark R. Paoletta, chief counsel for oversight and investigations at the House Energy and Commerce Committee. The business of cushioning the blow from congressional inquiries is expected to grow enormously because "Democrats are going to be very, very active," he said.
Certainly he hopes so. Paoletta, 44, is reversing allegiances in January. He has been hired by the law firm Dickstein Shapiro to specialize in guiding clients through congressional investigations -- the same kinds of investigations he's directed for the past nine years. Andrew L. Snowdon, an oversight and investigations counsel for the same committee, is also headed to Dickstein Shapiro.
Why the big turnabout? "I have four kids," Paoletta said. His oldest, he said, attends a private high school that costs $26,000 a year. Of his current post, he said, "I don't think there's a better job in the world." But corporations on the griddle need representation too, and they pay better.
So much better, in fact, that just about every company on K Street is vying for a piece of the soon-to-thrive "crisis management" business. The law firm Holland & Knight is flogging its newly formed Congressional Investigations Response Team. Promotional literature highlights the many former insiders now eager to assist their former nemeses: "Our ranks include two former Members of Congress, a former Minority Chief Counsel to the Senate Government Affairs Committee, a former Rules Committee Counsel, a former Chief of Staff for the House Republican Conference, and a former Chief of Staff to the Attorney General, among others."
Two former aides to the House's Government Reform Committee are also forming a partnership partly in hopes of attracting clients who want to know how to defeat the kinds of investigations they once managed. Barbara J. Comstock and Mark Corallo are setting out on their new venture because, Comstock said, "it helps to know the history of the committee, its subpoena power."
The Carmen Group, a lobbying firm, is building a government investigations division and has allied itself with one of the top names in congressional oversight: Franklin Silbey. He led the Senate Judiciary Committee's oversight subcommittee and was chief of investigations for the Senate Labor Committee. "The group will start as four people and we expect it will get larger," said David M. Carmen, president of the firm.
Public relations companies are also getting into the act. Dittus Communications and Public Strategies are hunting for clients who think they are about to be pounced upon. There ought to be a lot of clients around. "It doesn't take a decoder ring to figure out what the broad focus of the investigations will be," said Jeff Eller, Public Strategies' president. Among the many corporations that should expect a congressional onslaught, he said, are oil and drug companies, contractors to the Pentagon and the Homeland Security Department, hedge funds and any firm that produces anything that contributes to global warming, including electric utilities and auto manufacturers.
Not surprisingly -- but probably with good reason -- Eller recommends that companies that even suspect they're in jeopardy should take precautions. "If you have exposure today and you're likely going to get scrutiny by one or more committees, the best thing a company can do is prepare for that now," he said.
Advice varies widely among consultants about how best to approach an impending congressional investigation. Some say it's wise to hand over as much information as possible. Others say that would be the worst decision of all. Everyone agrees that oversight hearings are a very peculiar beast that require legal smarts, legislative insight and a keen attention to public perception.
"I've seen over and over again clients making the mistake of failing to appreciate the unique nature of this process," said Steven R. Ross, a partner at Akin Gump Strauss Hauer Feld and a former general counsel for the House. "People try to treat it as a pure litigation battle or as a lobbying exercise. In fact, it is a blend of the two."
Humility is also a good idea. When testifying before Congress, said former representative Gerry Sikorski (D-Minn.), now with Holland & Knight, "you are not a big-time, hot-shot CEO of a multibillion-dollar corporation. You are an American citizen, under oath and with limited rights, providing information to the U.S. Congress under their roof, rules and procedures."
Some targets also take the proceedings too lightly, which is a serious error, experts agree. "I've become more and more conservative with these things over the years," said Stanley M. Brand, head of the Brand Law Group and a veteran of such encounters. "My advice is to batten down the hatches, assert your rights if you have them, and don't go in and disgorge documents. These investigations are stalking horses for the Justice Department."
Comstock disagrees somewhat, preferring wide disclosure over secrecy. "If you do have some bad news or bad information, get it out yourself, on your own terms and explain it," she said.
Eller thinks flexibility is a key. For example, he prefers that his clients under congressional scrutiny say that they are "working with" the committee; he advises against using the word "cooperate." The former allows the client to withhold some information when necessary and not run afoul of the truth.
Boring is also better when it comes to O & I. Indeed, in a proceeding that's so public, targets would rather go unnoticed. That was certainly the case when a lawmaker-turned-lobbyist physically restrained a chief executive from standing in front of a picture of a crumpled car when news photographers were nearby during a hearing about roadway accidents.
Sometimes a good defense is a vigorous offense.Lobbyists' Holiday Cheer
Again, it's that time of year. Please e-mail examples of pro bono lobbying that you've done or that you know about for a special holiday column. Send examples early and often, and no later than this week, please. Thanks and cheers!