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The oversight industry.; Hearing Aid

Corporations beware! Henry Waxman is coming for you, subpoenas inhand. Now's the time to start panicking--or, at the very least, toring up one of several Washington, D.C., law firms that specializein helping clients under congressional investigation. "A simplephone call from a junior staffer on the Hill can snowball into acriminal prosecution. ... Being cautious at a time like this couldsave you, your business, and your reputation," warns the website ofBingham McCutchen, sounding not unlike a late-night Johnnie Cochranad. (One pictures a drowsy, channel-surfing CEO suddenly perking upon the couch.) Another firm, Holland & Knight, has been flauntingits newly assembled "Congressional Investigations Response Team,"with an all-star cast of former House and Senate staffers.

Now that Democrats have retaken Congress, the Era of Investigationsis upon us, and all around town, nervous corporations are gulpinghard over the carnage to come. Who can blame them for feelinguneasy? For over a decade, GOP oversight committees treatedbusinesses with the lightest of touches--indeed, Republicans havebeen declining to investigate bloated Halliburton contracts eversince Dick Cheney was still CEO. As a result, says James Hamilton,a partner at Bingham who specializes in defending clients underscrutiny from Congress, "Many companies are not at allknowledgeable about how to handle serious investigations." But notto fear--a large poster hanging in Bingham's lobby offers hope:great lawyers will find a way to turn the tables in your favor. Thepicture below it? A zebra lumbering after a retreating cheetah.

Washington being Washington, there's an ironic undercurrent to allthis activity. Many of the law firms now offering protection fromcongressional investigations are the same ones that, through theirlobbying operations, helped facilitate the envelope-pushingbehavior that got these corporations in trouble in the first place.It's all part of the natural cycle of the Washington economy: Whenthe GOP is in power, you make money by helping companies rig therules; when Dems take the reins (in part because voters can onlytake so much rule-rigging), you make money by helping companies getback off the hook. No wonder they say Washington isrecession-proof.

Democrats have only hinted at what investigations they'll conductover the next two years. But every lawyer has his or her own listof businesses that should start sweating: oil and drug companiesthat profited from Bush-era policies; corporations that snaggedno-bid contracts in Iraq; hedge funds. Some onlookers think thatCongress will likely go hard after private companies, rather thandirectly confront a White House that's expected to be less thancooperative. "Say Congress wants to examine the oil-drilling leaseshanded out by the Interior Department," says Charles Tiefer, aveteran of countless Democratic House inquiries and now a lawprofessor at the University of Baltimore. "The administration maynot want to cooperate. But, if you can get records from oilcompanies and make them public, then it becomes much harder forthem to resist and withhold information."

What makes the prospect of such investigations so nerve-racking isthat companies can't just win a verdict and move on. "Working on aninvestigation is very different from working in a courtroom," saysEleanor J. Hill, a partner at King & Spalding and a former staffdirector of the joint congressional inquiry into September 11."Congress has broader leeway on the type of questions they can ask,a lot of evidentiary rules don't apply, lawyers can't stand up andobject every five minutes, there's no umpire to appeal to if they'rebeing treated unfairly." The p.r. aspect also matters a greatdeal--businesses have to worry about their public image andreputation if they're being raked over the coals by a member ofCongress. One lawyer sounded an almost fatalistic note about theprocess: "A company facing congressional hearings often just has totake its lumps and move on--the object is often simply to limit thedamage, and a lot of damage you can't avoid."

So what can you do? How does the poor little zebra turn the tableson the cheetah? There's the diplomatic approach, for one, explainsJim Turner, a former Democratic representative from Texas who nowworks at Arnold & Porter, one of the top law firms dealing withinvestigations. "It really helps to know the people on thecommittee," he says. "You can find out the nature of the inquiry,you can tell them your side of the story and, sometimes, try to seeif there's a way to head off the need for hearings in the firstplace." Then again, Arnold & Porter ranks as one of the top lawfirms in the country, housed in a massive building downtown withvast resources at its disposal. One gets the sense that, faced withsuch an adversary, even Waxman might be amenable to a friendlychat.

Not everyone plays so nice, of course. "When I think about the oiland pharmaceutical industries," says Tiefer, "I think about theirability to respond to any request for documents with millions ofrecords to bury the inquirers and make it impossible to find theneedles in the haystack. The [committee] staff with relevantexpertise can often be counted on one hand and are no matchfor--literally--truckloads of documents." Most defense lawyers Ispoke to, however, were more demure about their ability to overwhelmCongress. "Hypothetically, I can have more lawyers, but they haveall the power to make demands, sway public opinion, hold hearings,issue subpoenas," says Lanny A. Breuer, a partner with Covington &Burling. "I'd like to think we're pretty good lawyers, but I don'thave that power."

More frequently, a company has to fight its battles in the realm ofpublic opinion. "If you're being treated unfairly, a lot of timesthe best and only recourse is to hit back in the area whereCongress is hoping to have an impact-- namely, through the press,"says Bradford A. Berenson, a partner at Sidley Austin and formercounsel for the Bush administration. "Committee chairs don't wantto come across as unfair. If a company is unable to work out itsdifferences, sometimes the only thing to do is complain publicly andopenly."

Of course, many of the law firms now offering to pull theircorporate clients out of political hot water were, not so long ago,helping them get into it. Take Dickstein Shapiro. Over the years,the firm has helped tobacco companies lobby to rewrite tobaccoregulations, energy companies to restructure the electric utilityindustry, and makers of bioterrorism prevention devices toinfluence homeland security legislation. Now that control ofCongress has flipped, some of those industries could well comeunder investigation--and may turn to Dickstein Shapiro for help.Little wonder, then, that, right after the midterms, the firm luredaway two top oversight lawyers from the House Energy and CommerceCommittee, which will likely put a number of companies under itsthumbscrews.

And it's not only white-shoe law firms that are rushing to grab apiece of the congressional-investigation pie. Smaller "crisismanagement" firms have been cropping up as well, offering to stepin, guns blazing, when things get ugly. One such firm was recentlyformed by Mark Corallo and Barbara Comstock, previously JusticeDepartment spokespersons for the Bush administration. Neither is astranger to high-stakes political brawls: Comstock, a longtime GOPoperative, worked as chief investigator for Representative DanBurton when his Committee on Government Reform and Oversight wasrummaging through Bill Clinton's personal life in the 1990s and nowmanages Scooter Libby's defense fund. Corallo, meanwhile, served asKarl Rove's spokesman during the Valerie Plame investigation.

Given this experience, the newly launched firm will be well-equippedto frame Democratic investigations as partisan witch hunts, shouldthe need arise. "You have to be subtle," says Corallo. "You can'tjust say, `Mr. Chairman, this is all politics.' But you can enlistoutside help--surrogates, people who can quickly come to yourdefense in the media by writing op-eds or going on television." Notthat Corallo is shy about entering the fray himself: When Truthout,a liberal Web publication, first reported--falsely, it turned out--that Rove had been indicted during the Plame affair, Corallodeclared the reporters in question "bald-faced liars or completelydelusional or both." Sometimes, Corallo suggests, you need to havea pugilist on your side, someone who understands how to work thepress. "Many law firms just don't understand this. I'm constantlysurprised at how naive people can be, even people who have been inthis town for 20 years." They'll have to learn quick.

By bradford plumer