Congressional Investigations Quarterly

MoFo’s Congressional Investigations Quarterly Client Alert is designed for busy in-house counsel, government affairs professionals, policy advocates, and legal practitioners seeking to navigate the ins and outs of congressional investigations. This edition covers April through June 2026 and explores the continuing congressional interest in consumer protection, healthcare affordability, and the intersection of technology and national security.

Consumer Protection and Safety Themes Continue

This quarter, Congress maintained its focus on consumer protection and safety issues across various industries, with particular attention to the use of artificial intelligence (AI) in consumer pricing and ensuring that children and other vulnerable groups are protected in the evolving digital landscape.

Consumer prices and competition. As covered in our last update, earlier this year, the House Committee on Oversight and Government Reform opened an investigation into the use of AI in algorithmic pricing by online transportation, travel, and delivery platforms. This quarter, over two dozen companies, predominantly grocery chains, received inquiries from House Energy & Commerce Committee Ranking Member Frank Pallone (D-NJ) on their use of AI in setting prices, as well as the companies’ policies on consumer data collection. In June, Senate Judiciary Chairman Chuck Grassley (R-IA) and Senator Amy Klobuchar (D-MN) introduced legislation, with additional bipartisan support, that would authorize DOJ, FTC, and state attorneys general to challenge discriminatory or exclusionary conduct, such as restricting competitors’ access or hindering users’ ability to change default settings, by the world’s largest online platforms.

Data centers and consumers. In June 2026, Senate Banking Committee Ranking Member Elizabeth Warren (D-MA) raised concerns about the impact of data centers on utility costs and sought information from investors in data center projects. Earlier this quarter, Senate Finance Committee Ranking Member Ron Wyden (D-OR) probed technology companies about the environmental impact of data centers and Senator Richard Blumenthal (D-CT), Ranking Member of the Senate Permanent Subcommittee on Investigations, sought information from state utility regulators in connection with his investigation into local impacts of data centers. This quarter, the House Energy and Commerce held a hearing examining data centers and the impact on ratepayers and the committee took steps to advance bipartisan legislation aimed at easing consumer utility costs. (In July, the Ratepayer Protection Act passed the full committee by a vote of 52-0.)

Online child safety and reporting. In April, Senate Judiciary Committee Chairman Grassley opened an investigation into major technology, gaming, and social media companies and their processes for reporting online child sexual exploitation. The committee later released the companies’ responses, which disclosed enhanced reporting practices. This serves as a reminder that responses to congressional inquiries may be publicized by congressional committees.

Digital and financial scams. A House Committee on Homeland Security subcommittee held a hearing this quarter examining online scams and digital extortion, including the role of nation-state adversaries such as China and Russia and the use of AI in online scams. In May, the House Select China Committee released an investigative report focused on a China-linked “scam center network” and concluded that Americans have been defrauded of at least $10 billion annually. Among other things, the report recommends public-private information sharing and reporting channels with financial institutions, digital asset exchanges, advertising systems, messaging platforms, telecommunications networks, cloud services, and satellite connectivity. The Joint Economic Committee also focused on scams this quarter and sought answers to a series of detailed questions from major telecommunications companies about their efforts to identify and curb scams. 

In the Healthcare Arena, Congress Remains Focused on Affordability, but Other Active Areas Are Emerging  

Healthcare. CEOs from hospital systems testified in April before the House Ways and Means Committee as Congress continues its focus on healthcare costs. Chairman Jason Smith (R-MO) blamed consolidation and mergers for high hospital costs. The House Oversight Committee continued its investigation of healthcare costs in federal programs and expanded the investigation in April to examine whether healthcare billing codes are driving up costs in federal healthcare programs.

Pharmaceuticals. In April, Senators Grassley and Maggie Hassan (D-NH) asked the Government Accountability Office to investigate the impact of prescription drug manufacturer coupons on privately insured patients. Senate Aging Committee Chairman Rick Scott (R-FL) and Ranking Member Kirsten Gillibrand (D-NY) continued their bipartisan investigation into pharmaceutical supply chain vulnerabilities this quarter. The House Select China Committee demanded records from pharmaceutical manufacturers of popular weight loss drugs regarding the companies’ clinical drug trials in China, claiming that conducting clinical trials in China exposes American companies to ethical and security risks.

National Security Concerns Drive Q2 Oversight Across Industries

While China-related scrutiny impacted consumer protection, healthcare, and foreign influence- related investigations, China featured prominently in other national security-focused investigations this quarter in areas such as medical research, foreign investment, shipping and logistics, AI, and defense.

Research labs and technology sharing. In April, House Oversight Committee Chairman James Comer (R-KY) announced an inquiry into U.S. government cooperation with China on science and technology research, alleging that the Chinese government exploits research agreements to steal intellectual property from American companies. Senators Tom Cotton (R-AR) and Mike Lee (R-UT) raised concerns about Chinese access to American energy labs, arguing that scientific cooperation puts American research at risk of foreign interference. In May, Senate and House committees demanded documents from universities regarding foreign research collaborations and financial partnerships with countries of concern.

Capital raising and investment in Chinese companies. In May, the House Select China Committee announced its findings from its investigation into U.S. financial institutions’ roles as sponsors and underwriters of a Hong Kong-listed company designated as a Chinese military company by the Department of War. The same month, the committee also called on the U.S. Treasury Department to designate biotechnology as a prohibited technology under the Comprehensive Outbound Investment National Security (COINS) Act, which would subject investment in Chinese biotechnology companies to outbound-investment review and increase scrutiny of transactions involving pharmaceuticals, clinical trials, and intellectual property licensing.

Chinese AI capabilities. In April, the House Select China Committee issued a report detailing the development of Chinese AI capabilities and made several policy and legislative recommendations intended to close perceived gaps in export controls and prevent model extraction. That month, the committee opened a joint investigation with the House Homeland Security Committee, sending letters to U.S. companies seeking documents on their use of Chinese-developed AI models. Also in this quarter, the House Select China Committee urged Secretary of State Marco Rubio to engage with the Dutch government to prevent a Dutch company from shipping tools to China to make AI chips, describing the planned shipments as a loophole in the allied export control regime.

Military defense. In April and June, the House Select China Committee sent letters to Secretary of War Pete Hegseth regarding the operations of U.S. defense contractors. In the April letter, Chairman John Moolenaar (R-MI) raised concerns about a defense contractor that may have provided satellite imagery of U.S. military assets in the Middle East to a Chinese company. In June, Chairman Moolenaar and Representative Elise Stefanik (R-NY) urged Secretary Hegseth to strictly enforce a new prohibition on U.S. defense contractors hiring lobbyists who also work with Chinese military companies.

Cryptocurrencies. Senate Permanent Subcommittee on Investigations Ranking Member Blumenthal expanded his existing inquiry into the use of cryptocurrencies by sanctioned entities. Senator Blumenthal asked a cryptocurrency issuer for records and information regarding the use of its stablecoin on sanctioned Iranian cryptocurrency exchanges.

Congress Maintains Its Interest in Foreign Influence on U.S. Policy and U.S. Companies

Foreign laws and standard-setting organizations. The House Science, Space, and Technology Committee is examining the influence of foreign environmental frameworks, such as international emissions accounting frameworks, on U.S. regulatory policies and corporate behavior. The House Oversight Committee also sought information this quarter from the Department of Commerce about the influence of environmental groups on international standard-setting bodies and the resulting impact on U.S. businesses. Finally, the chairmen of three House committees sent a letter to the European Union Ambassador to the United States requesting that the EU remove the extraterritorial mandate of the Corporate Sustainability Due Diligence Directive, arguing that the mandate conflicts with U.S. law and the 2025 EU-U.S. trade agreement and imposes significant burdens on American companies.

Data centers. In June 2026, following reports that foreign influence campaigns may be supporting efforts to skew public opinion against data center projects in the United States, House Energy and Commerce Chairman Brett Guthrie (R-KY) requested a briefing from the White House and the Federal Bureau of Investigation into actions the Trump administration is taking to investigate foreign influence campaigns relating to AI development. Similarly, Senate Select Committee on Intelligence Chairman Tom Cotton (R-AR) asked the Department of Justice to investigate the same allegations. Chairman Cotton noted that “common sense regulations and legislation” could address concerns about energy costs and strains on natural resources related to data centers but expressed concerns about foreign adversaries attempting to “extort these fears.”

Nonprofit networks. Republican lawmakers continued this quarter to press nonprofits over their tax-exempt status, foreign funding, and political activity, with several inquiries centered on alleged ties to the Chinese Communist Party. For example, in April, House Ways and Means Chairman Smith and House Select China Committee Chairman Moolenaar asked the IRS to examine the tax-exempt status of certain nonprofits. Chairman Smith also reiterated demands to U.S. nonprofits this quarter about foreign funding and fiscal sponsorships. Chairman Moolenaar separately opened an inquiry into whether an organization was required to register as a foreign agent in the United States. On a related issue, the House Judiciary Committee released a memorandum in May alleging that federal agencies under the Biden administration issued to 501(c)(3) organizations grants that may have been used to fund anti-Israel groups.

Democrats Continue to Preview Planned Investigations into Corporate Relationships with the Trump Administration

Continuing on a theme from Q1 2026, House and Senate Democrats sent numerous letters this quarter seeking information on alleged financial conflicts of interest within the Trump administration, corporate donations to Trump-aligned projects, and corporate interactions with the administration. For example, Democrats continue to probe corporate donations to the White House ballroom project and Trump presidential library as well as deals involving President Trump’s family members.

In addition, Democrats are examining the administration’s dealings involving energy, media, and pharmaceutical companies, as well as an alleged lack of transparency regarding government contracts, including those associated with the ongoing Lincoln Memorial Reflecting Pool renovation.

Investigative strategies and demands for records. A recent letter from Senate Democrats offers a preview of potential Democratic investigative strategies that could be employed against corporate entities should the party regain control of either chamber of Congress. In June, Senate Banking Committee Ranking Member Warren and Senate Environment and Public Works Committee Ranking Member Sheldon Whitehouse (D-RI) wrote to major energy companies requesting a wide range of nonpublic and competitively sensitive information about gasoline pricing and corporate earnings. The demands include nonpublic communications with Trump administration officials; communications with external lobbyists; details of political contributions not subject to public disclosure, such as contributions to 501(c)(4) and 501(c)(6) entities; internal analyses of pricing information; internal analyses of the financial impact of executive orders issued by President Trump; and board materials.

Other Active and Emerging Investigative Areas

• Prediction markets. In May, House Oversight Committee Chairman Comer opened an investigation into potential insider trading on prediction markets. Chairman Comer wrote to two prediction market platforms requesting documents and information to assess how the platforms verify account holder identities, enforce geographic restrictions, and monitor suspicious trading activity to guard against insider trading.
• Privacy and cybersecurity. In May, the House Homeland Security and Senate HELP Committees each sought information from a popular learning management system used by schools across the United States after cyberattacks that reportedly affected the data of over 275 million individuals. That same month, the Senate HELP Committee also pressed a telehealth provider on its cybersecurity practices following a security breach notification that was publicly disclosed by the California Attorney General under state law. The Senate HELP Committee also sought documents and information from a leading baby care products company whose online privacy policy disclosed that the company processed customers’ personal information in China. Finally, House Financial Services Committee Ranking Member Maxine Waters (D-CA) also sought information this quarter from several financial institutions about cybersecurity vulnerabilities in AI models, including requesting copies of internal AI frameworks. These inquiries highlight the risk of congressional attention following public disclosure of cyber risks, data breaches, and data collection policies.
• Elections and campaign finance. The House Judiciary, Administration, and Oversight Committees have continued their investigation into campaign finance issues, including a Democratic fundraising platform. For their part, the Democrats have announced similar investigations into a Republican fundraising platform. The House Oversight Committee continued its investigation into potential gaps in campaign finance law by issuing a subpoena in May for documents relating to the use of Democratic social media influencers. Chairman Comer also questioned the activities of a 501(c)(3) entity, suggesting that its activities were not legitimate tax-exempt activities and instead appeared to advance financial interests of private donors by lobbying against Trump administration initiatives and corporate mergers.
• Congress is also interested in how companies are playing a role in protecting and strengthening election integrity. In May, Representatives Mike Lawler (R-NY) and Josh Gottheimer (D-NJ) sent a bipartisan letter to several tech companies regarding the role of AI in election security and sought information on how companies are addressing political bias, misinformation, transparency, and source reliability in large language models ahead of the upcoming election cycle. One company recently issued a public statement on how it was responding to unique threats posed by malicious cyber actors and the rise of AI.
• Finally, in May, the Congressional Black Caucus sent an open letter to roughly 250 private companies seeking public commitments regarding voting rights. As the midterms draw closer, companies may see similar requests and pressure to make public statements on political issues.

For questions or additional information on these developments, please feel free to contact the Congressional Investigations team.