Most pharmaceutical executives are familiar with traditional government investigations. congressional investigations, however,
unfold differently and present disparate challenges than conventional grand jury investigations. Whereas traditional investigations
are usually conducted in secrecy before a grand jury, congressional investigations play out in public. Indeed, the publicity
generated by congressional investigations is often the main point of the whole affair. Congressional leaders want the opportunity
to speak publicly about pressing issues, and prosecutors like to use the fruits of the investigations to launch their own
In light of the political pressures to reduce federal spending, particularly spending on healthcare programs, pharmaceutical
companies should expect increased scrutiny from Congress. If you are called to testify before Congress, you want to be fully
prepared so that you can put your best foot forward on behalf of the company. The hallmarks of successful testimony are clear,
direct, and honest answers that present the company's viewpoint, while acknowledging any mistakes that the company has made
in the past.
Authority and Public Scope
There is no explicit Constitutional authority for conducting congressional investigations. Nevertheless, the practice has
long been recognized as "inherent in the legislative process." Congress first exercised its investigative power in 1792 to
review General Arthur St. Clair's defeat in a battle against Native Americans in the Northwest Territory. Congressional investigations
gained more prominence during the Progressive era, when they were used to examine monopolistic trusts and to expose the Teapot
Dome scandal. During the Great Depression, New Deal economic investigations led to the creation of numerous new securities
Congressional investigations came to further prominence during the 1950s, when the full power television added to the hearing
process was demonstrated by Senator Joseph McCarthy's inquiries of suspected communists and was watched by over 80 million
people. This ushered in the modern era of mass-media congressional investigations familiar to the public—think Watergate,
Iran-Contra, and Whitewater investigations.
Modern congressional investigations unfold under their own, unique rules. Pharmaceutical companies should understand these
procedures so they can be best prepared when and if they are summoned to appear before Congress.
Processes and Best Practices
The following are some key points to remember if you are facing a congressional investigation:
1) Congressional investigations unfold squarely within the public eye. The media coverage can be intense. Congress uses its investigative power to shine light on topics of public concern, and
tends to view the proceedings as a public record to be drawn on not only by Congress and the Executive branch, for legislative
and regulatory purposes, but by prosecutors for criminal investigations. Indeed, it is common for both the Chairman of the
committee conducting the investigation, and each member of the committee, to begin the proceedings with a speech addressing
their concerns with respect to the subject matter of the inquiry. The media coverage surrounding the investigations color
2) Congressional investigations unfold quickly. Grand jury investigations typically take months, or even years, to complete. Congressional investigations usually unfold
much more quickly. This is driven in part by the public nature of the proceedings: Intense media coverage often generates
a sense of urgency that compresses the time frame of the investigation.
3) CEOs often testify. Congress tends to call different witnesses than prosecutors pursuing traditional investigations. In grand jury investigations,
it is often those employees closest to the conduct who testify. In contrast, Congress tends to call representatives from the
highest levels of the company to testify, often including the chief executive. The witness may testify alone, or may be sworn
in as part of a panel. Sometimes the panel may be made up of witnesses from several different companies, or even different
industries. CEOs from competing companies may find themselves testifying on the same panel, sometimes at cross-purposes.
4) The proceedings are scripted at the start, and then veer into uncharted waters. The witnesses will be asked to come to the hearing with prepared opening remarks. Congress always requires these remarks
to be provided in advance, and the remarks are often fertile ground for questioning from the committee members. After reading
their opening remarks, the witnesses can expect to be peppered with questions from the various members of the committee, and
the questions may veer into unexpected areas. To the extent there is a panel of witnesses testifying, the testimony of other
witnesses may also unfold in unexpected ways, and lead to unexpected questions directed to your company's witness. To the
extent the company is publicly traded, the witness's responses can have a significant effect on the company's stock price.
If you are testifying, you want to stay on script, as it is often the unanticipated, unscripted statement that makes headlines.