Senate Democrats plan their own political counter-programming to House Republicans’ threats of wide-ranging probes into Joe Biden’s administration and his family, taking on issues like corporate tax avoidance and union-busting, issues sure to rankle the GOP.
(Bloomberg) — Senate Democrats plan their own political counter-programming to House Republicans’ threats of wide-ranging probes into Joe Biden’s administration and his family, taking on issues like corporate tax avoidance and union-busting, issues sure to rankle the GOP.
With an expanded majority, they now have the threat of subpoenas to haul corporate executives before their committees, and the pharmaceutical industry, big banks, and social media companies are among the anticipated early targets.
The heightened scrutiny of corporate America comes as Washington settles into two years of divided government and both parties look to gain political advantage heading into the 2024 election.
Alyssa DaCunha, a Washington lawyer whose firm has helped more than 40 executives prepare for hearings in the last five years, said companies are increasingly concerned about the potential for public grillings “and many more of them should be.”
Democrats picked up one additional Senate seat in last year’s elections, ending the 50-50 split in that chamber and allowing most committees to issue subpoenas on party-line votes. Senate Majority Leader Chuck Schumer signaled in December that subpoenas will be a key focus this year.
“Subpoena power can deal with corporate corruption and inequities and other problems throughout the country,” the New York Democrat said at a news conference. He declined to say what companies or industries he thinks would be subject to scrutiny.
The mere threat of a subpoena — and the negative publicity it portends — gives committee chairs leverage to get the CEO to the witness table, rather than the company providing an underling or negotiating a less-public questioning.
“It’s not hard to get a subpoena if you’re inclined to do that as a committee chair, so that’s the leverage they bring to the table,” said DaCunha, the co-chair of the congressional investigations practice at law firm WilmerHale. “It really makes all the difference in terms of everyone knowing where each other stands.”
Pharmaceutical Targets
With long-time critic Bernie Sanders taking over the Senate Health, Education, Labor and Pensions Committee, pharmaceutical companies will be under a microscope like no other. The progressive firebrand says he’s ready to order executives to appear and has recently taken particular aim at a “dysfunctional” and “broken” health-care system.
“We are living in a country today where drug companies are making huge profits while people split their life-saving pills in half because they can’t afford them,” the senator said this month.
Sanders has already put some CEOs on notice even before his panel starts work for the year.
He wrote to Moderna Inc. CEO Stephane Bancel on Jan. 10, asking about a report that the company might quadruple the price of its Covid-19 vaccine when it shifts from a government contract to commercial distribution.
“Let’s be clear: The purpose of the recent taxpayer investment in Moderna was to protect the health and lives of the American people, not to turn a handful of corporate executives and investors into multibillionaires,” Sanders wrote.
In a statement, Moderna said it is “committed to pricing that reflects the value that COVID-19 vaccines bring.” The firm also noted that most Americans would have their Covid-19 vaccines and boosters covered by insurance.
Tax rates for pharmaceutical companies will also be under scrutiny.
Just two days after Democrats picked up their crucial 51st seat, Senate Finance Committee Chair Ron Wyden suggested Amgen Inc. CEO Robert Bradway could be called to testify as part of a probe on the low effective tax rates paid by some of the biggest US drugmakers.
“In advance of potential public hearings and proposing new legislative changes, it is critical to understand how Amgen, a multinational pharmaceutical corporation based in the U.S. with annual sales of $26 billion primarily made to U.S. customers, paid a lower tax rate than a postal service worker or a preschool teacher,” Wyden wrote in a letter to Bradway.
The committee ominously called Wyden’s letter the “final request for voluntary compliance” with the investigation.
In a statement, Amgen said it has “cooperated voluntarily with the committee’s requests,” and that ongoing litigation between the company and the IRS limits the company’s ability to disclose some information. It said the panel is empowered by federal law to get some of the requested information directly from the IRS.
Corporate Queries
Senate Commerce Chair Maria Cantwell this month said she’d spoken with Southwest Airlines Co. CEO Bob Jordan about the company’s massive customer service and operational failures during the holiday season. She said she intends to hold a hearing as part of a reauthorization of the Federal Aviation Administration.
“Southwest’s customers are rightfully dissatisfied and deserve better,” Cantwell said.
Southwest Airlines said the company’s Washington staffers have been in “frequent communication” with Cantwell and Jordan has asked to “update her again on our progress.”
Cantwell told Bloomberg News that she also wants to convene a hearing of social media executives to examine balancing free speech and the accuracy of information exchanged online. She said she hasn’t decided which executives would be called and whether Twitter Inc.’s new owner, Elon Musk, would be among them. She said subpoenas would be used to compel executives to testify, if needed.
Meanwhile, Senate Banking Committee Chair Sherrod Brown plans to hold a Wall Street oversight hearing, after Bank of America Corp., JP Morgan Chase & Co., Wells Fargo & Co. and others last year appeared voluntarily to address what Brown called “consumer abuses,” an aide said. Other industry hearings are likely this year, the aide said.
Other confrontations are simmering. On Wednesday, Sanders sent a letter to Starbucks Corp. CEO Howard Schultz, accusing him of engaging in an “egregious union-busting campaign” that’s continued more than a year after a union at the coffee retailer was first certified by the National Labor Relations Board.
Sanders gave Schultz until Feb. 1 to respond to questions, including how much the company has spent on consultants and legal advice to push back on organizing drives at its stores.
“I have zero tolerance for large, profitable corporations that flagrantly violate labor law, treat their workers with contempt, and refuse to bargain in good faith,” Sanders said.
–With assistance from Robert Langreth, Mary Schlangenstein and Ike Swetlitz.
(Updates with Schumer in fifth and sixth paragraphs. An earlier version corrected the spelling of Alyssa DaCunha’s name)
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