A Democratic sweep of the midterms hands the 120th Congress subpoena power in January, and the incoming chairs have signaled where they mean to use it: crypto ventures, surveillance pricing, government equity deals and AI’s debt-fueled buildout, among others. A team of Baker Donelson attorneys and policy advisers explains why a company need not be accused of anything to receive a letter.
Democrats won control of both the House and the Senate in the Nov. 3 midterm elections. When the 120th Congress convenes in January 2027, the new majority will chair every committee and control subpoena power, investigative budgets and staff for the final two years of President Donald Trump’s second term in the White House.
Incoming committee leaders, including Rep. Robert Garcia, expected to chair the House Oversight Committee, and Sen. Ron Wyden, have signaled that oversight will be a priority. Congressional oversight of the executive branch is a routine feature of divided government, and both parties have exercised it when in the majority.
In congressional investigations, there is no judge, there are no rules of evidence and there is no guaranteed protection for the attorney-client privilege or work product. Congress recognizes only the Fifth Amendment privilege against self-incrimination as a right. Documents can be made public, quoted selectively at hearings or shared with regulators and plaintiffs’ lawyers.
What may happen
Expect oversight to begin rapidly and to come from several committees at once. Throughout 2026, Democratic ranking members sent minority letters, issued staff reports and made document-preservation demands. The new majority is expected to build on these efforts, and the volume of oversight activity is likely to increase significantly. Subject matter has reportedly been divided among committees in advance.
Announced priorities include:
- Corporate interactions with the administration and the president’s family, including cryptocurrency ventures, investment vehicles, White House-related donations, political committees and other arrangements involving private-sector organizations and administration officials.
- Federal contracts and government actions, including loans, tariff escalation or relief, merger approvals, government equity or “golden share” arrangements and regulatory exemptions or preferences involving companies that have engaged administration officials.
- Consumer protection, affordability and pricing, including healthcare costs, surveillance pricing and consumer financial services, as well as changes in the Consumer Financial Protection Bureau’s (CFPB) supervisory and enforcement priorities, junk fees, overdraft and credit card costs, medical debt reporting, “buy now, pay later” products and earned wage access products.
- Banking, “de-banking,” cryptocurrency and illicit finance, including congressional scrutiny of financial institutions, digital assets and related regulatory and enforcement policies.
- AI, including concerns about a potential investment “bubble” driven by debt-financed AI spending, the growing role of private credit and off-balance-sheet vehicles in funding that build-out and the resulting exposure of banks, insurers and retirement savers, as well as the rapid expansion of data centers needed to power AI and their effects on electricity rates, grid reliability, water use and local communities.
- Defense and aerospace, including review of the financial stake the US government has taken in critical material suppliers via favorable loan and grant conditions from the Office of Strategic Capital; investigation into defense industry donations and how that may (or may not) have affected contract and procurement decisions and investments; and the level of control companies have over critical weapons systems (space and airborne systems, AI, etc.), which puts the US government at various levels of risk.
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Read moreDetailsWhy private-sector organizations may receive requests
Committee leaders expect the administration to contest document requests, primarily through litigation. They have indicated they may seek the same information from third parties, including companies that communicated with, benefited from or did business with the administration. A company need not be accused of wrongdoing to receive a letter or subpoena. Industries already drawing attention include technology and AI, financial services and private capital, cryptocurrency, pharmaceuticals and health insurance, energy, defense and federal contracting.
Recent court decisions have also clarified the enforceability of congressional subpoenas. Courts have held that willful default on a congressional subpoena is a crime even when the witness relied on counsel’s advice (United States v. Bannon, subsequently vacated after the Justice Department moved to dismiss). They have held that only the president, not a subpoena recipient, can invoke executive privilege (United States v. Navarro, petition for certiorari filed Oct. 8, 2026). And they have held that a witness cannot sue to block a committee subpoena and must appear even if the witness plans to invoke the Fifth Amendment (de la Torre v. Cassidy).
Contempt referrals depend on Justice Department discretion, and committees have other enforcement tools, including civil enforcement, public hearings and referrals to state attorneys general. Some committee members have indicated they may coordinate with state AGs.
How to prepare and respond
These steps are advisable regardless of which party controls Congress and apply to any congressional inquiry.
- Assess exposure now. Under counsel’s direction, identify all formal and informal communications with the White House and agencies, as well as government contracts, funding, approvals, donations and sponsorships that may attract interest.
- Do not act alone on privilege. If a request reaches communications with the White House, counsel should address any privilege question with the committee and the White House Counsel’s Office. A company cannot assert executive privilege on its own.
Several developments will shape how these investigations unfold: the organization of committees and the use of subpoena authority when the 120th Congress convenes in January 2027; the Supreme Court’s response to the pending petition for certiorari in United States v. Navarro on executive privilege; and the extent to which committee members coordinate with state attorneys general. Organizations should watch for letters from committee members in the coming weeks, which may signal the scope of 2027 inquiries.
