Corporate America lawyers up in anticipation of GOP House

Fortune 500 companies are retaining major law firms with GOP relationships in anticipation of a Republican-controlled House eager for retribution against corporations it views as abetting left-wing forces.

Why it matters: Once the allies of big business, the modern Republican Party is preparing to accelerate a political realignment by wielding Congress' subpoena power against key segments of corporate America.

• Targets would likely include Big Tech companies conservatives have criticized as overly censorious, financial giants pushing sustainable investing and beneficiaries of massive Biden-era spending programs.

How we got here: Increased corporate engagement on social issues such as racial justice and abortion rights has pitted huge segments of corporate America against GOP policy orthodoxy.

• Republicans see the focus on equity, sustainability and governance reform as an ideological affront, and they plan to make it a central target of their investigative agenda.
• When scores of companies slashed donations to members of Congress who objected to Biden's win on Jan. 6, they repudiated a hard-right GOP faction expected to grow in the coming Congress.

The split has left corporate America desperately seeking out the scant few firms in Washington that can help forge inroads with a GOP caucus less amenable to business concerns than in years past.

• "Republican lobbyists for years delivered win after win after win for corporate America with a Republican Party that wanted to help," one K Street Republican told Axios.
• "A lot of those members that helped deliver those wins have retired or lost elections, and are being replaced by people that could care less about building a relationship with a Fortune 500 company's in-house lobbyist."

What we're watching: Major legislation — from COVID-19 aid and the chip funding bill to the Inflation Reduction Act and the bipartisan infrastructure bill — will provide ripe oversight opportunities for Republicans who have railed against excessive spending.

• Companies should review the federal programs they've participated in and decide whether they might fall under the microscope of a Republican Congress, said Michael Bell, an attorney at global law firm Hogan Lovells.

Behind the scenes: Holland & Knight partner Christopher Armstrong, who specializes in congressional investigations, told Axios he’s briefing corporate clients on a presumptive GOP caucus eyeing oversight powers to target private companies.

• "In past Congresses, Republicans would be expected to focus oversight on the administration," he said. "Obviously, that will happen. But the presumption against them investigating private companies? I think those days are over."
• Aaron Cutler, head of the congressional investigations practice at Hogan Lovells, told Axios that his firm organizes two- to three-hour simulations to grill CEOs and "get under their skin" like a member of Congress would.

These preparations aren't grounded in paranoia: For months, top House conservatives and outside allies have been plotting investigative strategies into private as well as public entities.

• If Republicans retake investigative powers in November, "the days of just focusing on government agency action are over," Mike Howell, who leads the Heritage Foundation's Oversight Project, told Axios over the summer.
• "It's not just the government now where the left is enacting its agenda; it's in corporate boardrooms, it's in school boards."

Flashback: The current moment is reminiscent of 2010, when the GOP took control of the House in the wake of sweeping Democrat-backed legislation like the Affordable Care Act and the American Recovery and Reinvestment Act addressing the Great Recession.

• The GOP oversight investigations that followed uncovered Solyndra, a solar panel company that went bankrupt after receiving $535 million in federal loan guarantees from an Obama-era stimulus bill.
• "A year from now, there will be another household name — it's not going to be Solyndra — that is emblematic of the waste, fraud and abuse," said Jim Barnette, a partner at Steptoe & Johnson who previously served as general counsel for the House Energy Committee.