Blumenthal targets major companies with a Jan. 4 records deadline

Companies prepared for possible Democratic control of Congress and investigations

Congressional Democrats moved within days of their election victories to open investigations into major American corporations. Sen. Richard Blumenthal put a group of companies on notice with a Jan. 4 deadline for producing records, a date that falls on the first full day of the new Congress. Two days after the election, Blumenthal sent dozens of letters to Amazon, Apple, BlackRock, Booz Allen, Coinbase, Alphabet’s Google, Microsoft, Salesforce, ServiceNow and Union Pacific, among others. He identified them as known donors to Trump’s White House ballroom project.

Blumenthal, who is set to chair the Senate Permanent Subcommittee on Investigations, warned recipients that failure to respond by Jan. 4 would leave him “no choice but to consider alternative measures to obtain compliance.” He also sent additional letters to cryptocurrency firms about their Trump family ties. The Wall Street Journal reported that Democrats had established a long list of interest areas, with corporate ties to President Trump and his legacy projects at the top. Amazon, Apple, Live Nation and Walmart were among the largest businesses affected by the initial wave of scrutiny.

Some companies had spent months preparing for the possibility that Democrats would win control of Congress and launch a wave of investigations, The Wall Street Journal reported. Those businesses hired firms including Akin Gump, Arnold & Porter, Crowell & Moring and Quinn Emanuel. According to lawyers and executives involved in the preparations, the businesses were mapping likely topics of scrutiny, collecting documents, interviewing employees and running “wargame” simulations to begin auditing and cataloging their exposure.

Lawyers said the companies were acting with fresh urgency. One lawyer recalled receiving a signed retainer from a client on Wednesday after weeks of waiting for a response. Conflict-of-interest rules limit the clients that firms can take on, so businesses that had not already retained experienced congressional-investigations lawyers were racing to catch up.

The Wall Street Journal reported that exit polls showed anger about affordability and corruption were key motivations for voters in handing Democrats both chambers. The outlet said those motivations prompted the party to pursue big companies aggressively. Rafi Prober, a Simpson Thacher partner who co-heads the firm’s congressional-investigations practice, said, “Usually investigations are an outgrowth of an election; this time it was the point.”

Democrats on key committees had spent weeks or months laying groundwork, dispatching targeted document-preservation requests across technology, energy, aerospace and healthcare, and companies responded cautiously, The Wall Street Journal reported. In late August, Jared Huffman, the most senior Democrat on the House Natural Resources Committee, sent preservation requests to two dozen companies listed as corporate sponsors or partners of Freedom 250 LLC. The Journal described Freedom 250 LLC as a “Trump-aligned group” that organized the nation’s 250th celebrations, including the Freedom 250 Grand Prix race held in Washington, D.C. Chevron, Exxon, Lockheed Martin, Mastercard, Oracle, United Airlines and UnitedHealth Group were among the companies contacted.

Some recipients sent short responses acknowledging receipt, according to people familiar with the communications. They talked informally among themselves, wondering whether the committee’s jurisdictional hook — linking the Washington, D.C., race to the lawmaker’s Department of Interior oversight — was a stretch. Other companies turned over documents, one of the people said. Separately, Democratic investigators were scrutinizing data-analysis company Palantir over contracts with the Department of Homeland Security.

On the eve of the election, Democrats on the Senate Banking Committee released a report titled “Nine Ways Trump’s Corruption Is Costing You.” The report named Toyota, Walmart, Live Nation and major banks among companies that allegedly received favorable treatment from the government after contributing to Trump’s inauguration.

The House Judiciary Committee also began reaching out to lawyers involved in an antitrust lawsuit against Live Nation. The Wall Street Journal reported that senior Justice Department officials settled the case at Trump’s direction and that the deal was hammered out at the White House with the involvement of Live Nation’s lawyers at Sullivan & Cromwell, which represents Trump in some of his personal litigation. A Live Nation spokeswoman said the settlement terms adequately addressed the antitrust claims made in the government’s lawsuit. “We’re ready to walk any policymaker through how and why it was reached,” the spokeswoman said.

Jamie Raskin, the Democrat set to chair the Judiciary Committee, has said he is ready to subpoena law firms that struck deals with the Trump administration “promising to do pro bono work for the president’s favored causes to neutralize punitive executive orders.”

The Wall Street Journal said one reason Democrats were focusing on businesses was that the inquiries could provide an easier route for investigators seeking information about the Trump administration. The outlet characterized companies as having sought to avoid conflict with the White House but said they could now face difficult questions about turning over their correspondence with Trump officials. “It’s going to put companies between a rock and a hard place,” said James Bair, a former congressional investigator who is now a partner at Crowell & Moring.

Even companies that have been “out of the spotlight” were wondering if they could be pulled into oversight hearings, given the size of the Democratic majority, said Brandon Farris, executive vice president at the Steel Manufacturers Association.

Robert Kelner, a partner at Covington & Burling who heads the firm’s congressional-investigations group, said that during Democrats’ stint in the House majority in Trump’s first term, many people within the party and legal circles viewed Congress as overextending itself with too many targets and wasting valuable time with protracted court fights. Kelner said the magnitude of Democrats’ victories also means companies “will have fewer allies.” “The scale means that congressional Democrats will be maximally incentivized to aggressively pursue companies in investigations.”

Big questions remain about how congressional Democrats will handle their regained power, including how strictly party leaders will ensure that different committees stay out of each other’s lanes and focus on issues that resonate with voters.