Preparing for Investigations by the New House Select Committee on China

Preparing for Investigations by the New House Select Committee on China

January 18, 2023, Covington Alert

Recently, the House of Representatives formally established the new “Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party,” with a bipartisan vote of 365-65. The Select Committee, to be chaired by Rep. Mike Gallagher (R-WI), a former military intelligence officer who also serves on the House Intelligence Committee, has been in the works for some time. The Select Committee will be heavily focused on oversight and investigations and is expected to scrutinize, among other things, U.S. businesses operating in China, businesses in China on which the United States is perceived to depend, and other areas where Congress sees opportunities for private industry to bolster America’s competitive position against China. The Select Committee’s objectives are clear—companies, entities, and individuals with significant cross-border business with China should get ready for expected oversight now.

Below, we outline key knowns and unknowns about the Select Committee, and offer suggestions to prepare for its expected activities.

How will the Select Committee conduct oversight and investigations?

The Select Committee is expected to begin its work immediately, but has no legislative jurisdiction and “shall have no authority to take legislative action on any bill or resolution” according to the terms of House Resolution 11 (H.R. 11) establishing the Select Committee. Rather, the Select Committee’s “sole authority” is “to investigate and submit policy recommendations on the status of the Chinese Communist Party’s economic, technological, and security progress and its competition with the United States” and to “hold public hearings in connection with any aspect of its investigative functions.” In other words, the Select Committee is going to use oversight and investigations—and the media attention they attract—to build support for its policy agenda.

For this reason, we anticipate the Select Committee on China will quickly commit to significant and robust investigations that involve companies, individuals, and other entities that have significant dealings with China, much in the same way that the Select Committee on the January 6th Capitol Attack and the Select Subcommittee on the Coronavirus Crisis conducted investigations in the prior Congress. Such investigations will likely include requesting information and documents and seeking testimony—both behind closed doors and in hearings that are well-covered by the Washington press corps. Those that fail to cooperate voluntarily with the Select Committee’s demands may be subject to public reprimands, compulsory process, or both.

Under H.R. 11, the Select Committee is expressly authorized to issue subpoenas and take depositions from witnesses, in contrast to the reconstituted Select Subcommittee to investigate “the origins of the Coronavirus pandemic,” which “may not authorize and issue subpoenas” without the direct acquiescence of the Chair of the Committee on Oversight and Accountability. Specifically, section 1(b)(4)(A) of H.R. 11 situates the Select Committee in much the same posture as a “standing committee of the House,” and provides that House “Rules X and XI shall apply to the Select Committee” just as they would to a standing committee (with some limited exceptions). Therefore, under House Rule XI, clause 2(m)(1)(A), the Select Committee possesses broad authority “to require, by subpoena or otherwise, the attendance and testimony of such witnesses and the production of such books, records, correspondence, memoranda, papers, and documents as it considers necessary.”

The decision to empower the Select Committee on China with its own subpoena authority is a strong hint that it will forcefully undertake investigations with all tools available, and Chair Gallagher may follow the investigative roadmap and precedents set by Democrats in the last Congress. As further explored below, Speaker Kevin McCarthy (R-CA) (in a joint announcement with Chair Gallagher) has specifically telegraphed that the Select Committee should be aggressive by working to “expose our dangerous dependence on China” and “prevent” entities from “financing communist genocide” and “investing in China.”

To accomplish these aims, the Select Committee is likely to demand internal records from those with significant investments in or from entities in China, and seek televised hearing testimony from CEOs and other senior executives of American companies with operations in China.

Who will sit on the Select Committee?

With the exception of Chair Gallagher, the Select Committee has not yet announced its membership (the Select Committee, as yet, has no website). Under H.R. 11, the Select Committee is to be composed of “not more than 16 Members,” with “not more than 7 of whom shall be appointed after consultation with the Minority Leader.” Accordingly, the Select Committee will include—or at least is intended to include—members of both parties. In the past, Republican efforts (led by then-Minority Leader McCarthy) to empanel a bipartisan, Joint Task Force on China were unsuccessful when Democrats (then in the Majority) declined to join its ranks.

This time around, however, there is strong reason to believe Democrats will be involved. For one, the resolution establishing the Select Committee easily passed in a bipartisan vote, and multiple Democrats have reportedly expressed interest in serving as the panel’s Ranking Member. Furthermore, in the last few years, there has been increasing bipartisan action on China-related policy proposals, as evidenced by the recent work of another China-focused congressional body, the Congressional-Executive Commission on China (CECC). The CECC routinely conducts inquiries and hearings in a relatively bipartisan manner, and several recent letters from the CECC are signed by Commissioners from both Parties, which is relatively unusual for committees conducting congressional investigations.

Both Chair Gallagher and Speaker McCarthy have strongly emphasized the Select Committee’s bipartisan mission. Just a day after the passage of the Republicans’ rules package, Speaker McCarthy remarked that with respect to China, both parties should “speak with one voice,” and offered his “word and [his] commitment” that “this is not a partisan Committee” and “at the end of the day,” there should not be a “majority and minority report,” but “one philosophy.” Speaker McCarthy added that the Select Committee is for “serious lawmakers” who will work together to solve “our greatest challenges,” not “for somebody to go in and be viral to make some point.” Elsewhere, Chair Gallagher has expressed his hope that Democrats will “nominate serious, sober people to participate, because defending America from Chinese Communist Party aggression should not be a partisan thing.”

What issues and industries will be targets for the Select Committee?

Although the Select Committee has not formally announced its investigative agenda yet, Republican leadership has generally described issues and industries on which the Select Committee may focus. Examples include the following:

• Foreign Investment in China: Chair Gallagher has repeatedly expressed concerns about United States investment in China and indicated that he will consider creating “a system for monitoring and blocking US investments in China.” In one interview, for example, Chair Gallagher suggested that the Committee may hold “field hearings” to explore “the right guardrails” on investments to ensure that entities like university endowments are “not subsidizing genocide or Chinese military modernization.”
• Dependence on Supply Chains and Products from China: Speaker McCarthy has already commented on how the COVID-19 pandemic led to “not knowing whether we could have our medical supplies” that were produced in China. Medical devices, supplies, and pharmaceutical products (such as antibiotics and generic drugs) sourced from China are likely to be key items for the Select Committee. Beyond the health care space, the Select Committee is also expected to consider Chinese strength in the oil and gas and renewable energy spaces, as well as Chinese dominance in “rare earth metals, alloys, and permanent magnets,” and seek to “build secure sources for critical supply chains.”
• China’s Threats to Cybersecurity, Privacy, and Intellectual Property: Chinese infiltration into the American consumer space and access to American data has historically been a major focus for Chair Gallagher. Technology companies may be expected to provide answers about how they protect U.S.-based data and intellectual property from being accessed by the Chinese government.
• China’s Influence in American Education: The Select Committee “will investigate the CCP’s attempts at infiltrating our academic institutions and the rise and proliferation of Confucius Institutes in the United States as organs of the CCP.” Universities and educational organizations should be prepared to respond to questions from the Select Committee.

If you have any questions concerning the material discussed in this client alert, please contact the members of our Congressional Investigations practice.