This is the seventh and last post in our start-of-year series examining important trends in white collar law and investigations in the coming year. Our previous entry discussed sanctions and export controls trends in 2020. We look forward to keep you apprised of developments in all of these areas in the year ahead.
In 2019 we saw the conclusion of a nationally-significant grand jury matter in the Mueller investigation, and the beginning of an even more historic and remarkable congressional inquiry in the investigation and impeachment of President Trump. These events have caused many citizens across the country to encounter and give thought to our criminal and legislative investigation processes. Importantly, for companies and individuals who may face investigations by the executive (DOJ) or legislative branches in the future, the past year has provided a stark example of the significant similarities and differences between proceedings in these spheres. While some tactics are certainly common to both grand jury and congressional investigations—such as establishing and maintaining effective communication with the government actors involved—the differences in authority, publicity, and scope often require nuanced approaches in one forum that may not be effective in the other.
For example, consider subpoenas issued by a grand jury or Congress. Like civil subpoenas, both grand jury and congressional subpoenas often appear broad. However, the scopes of these subpoenas can vary. Grand jury subpoenas are generally targeted at a broad set of materials covering a relatively discrete subject matter: the potentially criminal actions of a company or set of individuals, for example. The effective scope of a grand jury investigation is therefore fairly tailored and it is generally unwise to parse their wording too closely. Managing the response, and ultimately providing agreed upon but complete disclosure of documents if and when required is generally an appropriate strategy to put a company in a good position with investigators. In other words, in grand jury subpoena responses it is generally better to disclose fully and defend strategically and vigorously.
Congress, on the other hand, has incredibly broad subpoena authority, extending to investigation any issue “on which legislation could be had.” McGrain v. Daugherty, 273 U.S. 135, 177 (1927). Essentially, Congress can look into anything that might have to do with current laws or potential legislation. Congressional subpoenas may be issued to a wide of array of companies and individuals, and often go out on broad subjects to large companies on nationally significant issues. Here, it is often necessary and entirely reasonable to work with Congress on the scope, and tailor the production to what matters, rather than a scorched earth response.
Another factor to consider in responding to subpoenas is, quite frankly, the implied threat that each represents. In grand jury cases, the matter under investigation is necessarily criminal, meaning the government actors involved are prosecutors and law enforcement. The tools they have at their disposal if they feel a subpoena is or would be ineffective go beyond mere contempt findings, and extend to such things as obtaining and executing search warrants (themselves incredibly intrusive and disruptive) and seeking criminal obstruction charges. Congress famously has a relatively ineffective remedy for non-compliance, which is holding a person in contempt of Congress. While this is by no means an argument for non-compliance in response to a congressional subpoena, it does show that a subpoena recipient may, in some cases, take a stronger stance on what is appropriate in response to a congressional inquiry. Of course, the public nature of congressional inquiries stands in stark contrast to the secrecy of grand jury proceedings, and often provides a strong, if different, incentive to simply comply with requests from Congress.
In that vein, publicity, or the lack thereof, may in many cases be a significant distinguishing factor between grand jury and congressional matters that results in different strategic calls. In grand jury cases, the jurors, prosecutors, and law enforcement agents are bound to maintain the secrecy of testimony and materials obtained by the grand jury. While certain grand jury matters may become publicized during the investigation, and any indictment or plea will in most cases be made public, it is often the case that grand jury matters can be managed and defended for at least a period of time without all of the details finding their way into the spotlight. This means that, in a grand jury matter, it is possible to stay out of the public spotlight and manage the case for a very small and particular audience, namely, the prosecution. In contrast, congressional inquiries are public from beginning to end. In fact, it often appears in congressional inquiries that publicity in and of itself is a significant goal of the investigation. As a result, effective handling of a congressional inquiry requires knowing when and how to ask for confidential treatment of materials turned over to Congress, while also carefully managing the response and messaging given that it is impossible to ensure such confidential treatment will obtain.
Finally, it is of course important to recognize that the stakes are not at all alike in grand jury and congressional investigations. Grand jury cases have an aim of charging and eventually convicting companies or people of crimes. Congressional inquiries necessarily are set up with an eye towards making, revising, or repealing laws (though in some notable cases, Congress has obtained facts in an investigation that led to subsequent grand jury action). Given the different stakes, in a grand jury investigation, the goal for subjects is to prepare at all times to defend vigorously if and when possible and necessary. In the case of a congressional inquiry, the goal is more likely along the lines of “do no harm,” and do not appear unnecessarily defensive.
For the vast majority of citizens and companies, the difficult and potentially fearful situation of a grand jury or congressional investigation will never be a reality. But if executive or legislative branches do come calling, it is incredibly important to engage counsel who is highly experienced in the various rules and practical realities in play, and who understands fully how to effectively manage the matter in light of the context in which it arises.