Issa plans to crack down on government spending

By Amanda Becker
Monday, December 13, 2010; 14

California Republican Darrell Issa has made no secret that come January there is a new sheriff in town.

The incoming chairman of the House Oversight and Government Reform Committee has promised to conduct a blitz of investigations into government waste, publicly urging his subcommittees to hold two hearings a week for 40 weeks in the new year and promoting legislation that would extend the authority of federal agency watchdogs to ferret out fraud.

Though the frequency of hearings was meant to be "illustrative and not literal," according to an Issa spokesman, the sheer scope of the congressman's plan, crafted as part of larger Republican agenda to target government spending, has area lawyers gearing up.

"If there's a hearing a day, there are subpoenas. Whenever there are subpoenas, there are people needing representation close behind," said Melanie Sloan, the executive director of Citizens for Responsibility and Ethics in Washington, who is leaving the watchdog group in January to join lawyer, lobbyist and media fixture Lanny J. Davis at his namesake firm, Lanny J. Davis & Associates.

Davis, spokesman and attorney to Bill Clinton during the former president's impeachment proceedings and the investigations into his finances, said he brought on Sloan to "clone himself" in preparation for the stepped up oversight. Attorneys who can "get out of the courtroom and talk to reporters directly" are going to be in demand as the probes grow more frequent, said Davis, who has formed the Davis-Block consultancy with media guru Joshua S. Block to help deal with the crush.

Other area firms -- Patton Boggs; Orrick, Herrington & Sutcliffe; and McDermott Will & Emery, to name three -- are positioned to deploy key practice groups at the intersection of government investigations, politics and media. The local offices of firms with ties to current and former members of President Obama's legal team, including Perkins Coie; Skadden, Arps, Slate, Meagher & Flom; and Zuckerman Spaeder, are also likely to be tapped should administration staffers require representation.

Issa has said that his investigation style will be his own, indicating he will neither pursue the sort of scandal-centric examinations pioneered by Rep. Dan Burton (R-Ind.) in the 1990s when he sought to look into Clinton's personal life or the approach of the current committee chairman, Rep. Edolphus Towns (D-N.Y.), who Issa says ignored his requests for oversight hearings into food safety, Fannie Mae, Freddie Mac and stimulus money going to the National Endowment for the Arts.

In a speech before a group of Pennsylvania Republicans this fall, Issa promised he would not have "corporate America live in fear that we're going to subpoena everything. I will use it to get the very information that today the White House is either shredding or not producing."

Indeed, Environmental Protection Agency head Lisa P. Jackson "is going to have her own parking spot up at the Rayburn" building, according to the incoming Energy and Commerce Committee chairman, Rep. Fred Upton ((R-Mich.).


But that doesn't mean the private sector is off the hook. Issa has pledged to focus on what he calls waste within targeted government agencies, which could affect the contractors associated with those agencies.

"They're going to take aggressive looks at administration policies, procedures and programs," said Venable's Raymond V. Shepherd III, himself a former counsel to the Senate's chief investigations committee. "To the extent these implicate private entities, you're going to find the private sector involved."

An added wrinkle is bipartisan legislation introduced by Issa and Towns that would extend the authority to compel witness testimony to all 74 inspectors general within federal agencies (currently only the top watchdog at the Defense Department has that ability). The Inspector General Authority Improvement Act of 2010 has become one of Issa's favorite talking points, which he has promoted at industry conferences and on cable television news shows.

In a 30-page report released with the bill, Issa himself pointed out that when agencies have conducted past investigations, particularly those into the rebuilding of Iraq and Afghanistan, the committee has found that they "often cannot be sufficiently concluded because of the inability to interview key fact witnesses" and that nongovernment workers such as "employees of government contractors and subcontractors are acutely aware of the limits inspectors general have."

If the bill passes -- and Issa has promised to make it a priority -- inspectors general will be able to proactively identify fraud, in part by pointing the finger outside the agency. In a recent report, Issa said recent legislation such as the Troubled Assets Protection Program, the American Recovery and Reinvestment Act and the health-care law have created a "tsunami of opacity, waste, fraud and abuse" that is rife with opportunity for investigation.

"At a granular level, the legislation expands the power of inspectors general to subpoena companies and individuals who do business with the government, and also authorizes more investigations of former government employees," said Reginald J. Brown, who practices in WilmerHale's litigation and controversy departments. "Instead of just one congressional committee and a couple of subcommittees, you're going to potentially have 70-plus investigators with an expanded mandate to look for wrongdoing, it would expand the number of people who are called in for these investigations exponentially and the expenses from such investigations can be personally ruinous."

Critics of the plan warn the ramifications of the inspectors general bill extend far beyond the need for more individuals to retain legal counsel, arguing seasoned Justice Department prosecutors are better equipped to take formal witness testimony. Even once the initial deposition has concluded, attorneys say there is an increased chance that such a hearing could lead to secondary investigations into whether someone lied during a deposition or failed to produce key evidence, rather than into the underlying offense.

"There are a lot of ugly things that can happen if you innocently miss a document," Davis warned.

Whether Issa will realize his overall vision to eliminate government waste remains to be seen, but his intention to double his staff at the outset of the next Congress, ramp up oversight efforts and grant new powers to inspectors general has attorneys at the ready.

"We're going to see more of these cases than we can shake a stick at," said Stephen M. Ryan, head of McDermott's government strategies group. "It will make the attorneys on the criminal defense bar wealthy beyond the imagination to defend all those depositions."

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