This week brought us two notable hearings on Capitol Hill as Mylan (
MYL - Analyst Report) CEO Heather Bresch faced questions from a House committee regarding her company’s price hikes on EpiPens, and Wells Fargo ( WFC - Analyst Report) CEO John Stumpf testified in front of a Senate panel about his company’s fraudulent account-opening scandal.
Both testimonies brought us a considerable amount of drama. Stumpf faced off against several heated senators, including Rep. Elizabeth Warren (D-VT), who suggested that he and Wells Fargo should be criminally investigated. Bresch’s testimony was also criticized from both sides of the aisle, and several representatives were openly skeptical of her logic.
Despite the drama, this week’s hearings were nothing new for Congress, which routinely invites the subjects of its investigations to publicly answer questions. While congressional witnesses are often other governmental officials or relevant experts, corporate executives are certainly no strangers to Capitol Hill.
Throughout the years, we’ve seen a number of CEOs and company chairmen swear an oath and answer questions regarding scandals that their companies are involved in. Some choose to plead the fifth; others choose to say outrageous things. Check out five of the most shocking congressional testimonies from CEOs:
1. “Do you understand how isolated you are in the belief from the entire scientific community?”
In 1994, top executives from the seven largest American tobacco companies were called into a House hearing on the regulation of the tobacco industry. In one of the most appalling moments in congressional history, all seven executives claimed that smoking was not addictive.
Then-CEO of R.J. Reynold’s (
RAI - Analyst Report) James Johnston compared the addictive qualities of cigarettes to that of a Twinkies snack, while Lorillard Tobacco Company (which was purchased by R.J. Reynold’s) chairman Andrew Tisch claimed he did not believe smoking caused cancer.
When Rep. Henry Waxon (D-CA) asked Tisch, “Do you understand how isolated you are in the belief from the entire scientific community?,” Tisch simply responded with, “I do, sir.”
2. “I’m just really concerned about their safety”
After a number of top AIG (
AIG - Analyst Report) executives received performance bonuses despite the company needing a $180 billion bailout from the government, a House panel in 2009 called AIG CEO Edward Liddy in for questioning. When Rep. Barney Frank (D-MA) asked Liddy for a list of the executives who received a bonus, few were prepared for what was about to happen.
Instead of providing Frank with that list, Liddy began reading off a death threat that had been sent to AIG: “All the executives and their families should be executed with piano wire around their necks. I’m looking for all the CEOs names, kids, where they live.”
Liddy would remain steadfast in his refusal to publicly announce a list of those who received bonuses and justified his actions by saying, “I’m just really concerned about their safety.”
3. “It was installed for this purpose, yes”
When a foreign company derives methods to cheat U.S. regulations, you can bet that Congress will have something to say about it. That was exactly the case in 2015, when Volkswagen (
VLKAY - Snapshot Report) was caught using software in its diesel vehicles to rig emissions tests.
Michael Horn, the CEO of Volkswagen’s U.S. business, was called to testify in front of the House Committee on Energy. Some representatives, including Rep. Joe Barton (R-TX), questioned the legitimacy of Horn’s claims that the software cheat was created by a few programmers with no knowledge from top executives.
“I agree, it’s very hard to believe,” Horn said. The chief executive would later clarify, “It was installed for this purpose, yes,” when asked whether or not the software was designed to intentionally cheat the emissions test.
4. “I think that’s very unfortunate to have on email”
There were a number of hearings and investigations after the 2008 economic collapse. The American public demanded answers from the country’s biggest banking executives, and congressional questioning was one way to get those answers.
In 2010, Lloyd Blankfein of Goldman Sachs (
GS - Analyst Report) testified about why his company continued to market mortgage investments even as the housing market collapsed. The company seemingly knew they were giving out bad loans, and it was a topic of discussion in employee emails.
Sen. Carl Levin (D-MI) questioned Blankfein about these emails: “When you heard that your employees, in these emails, said, God, what a sh—ty deal; God, what a piece of crap; do you feel anything?”
“I think that’s very unfortunate to have on email,” Blankfein responded. Gee… ya think?
5. “We don’t depend on tax gimmicks”
Under the control of Steve Jobs, Apple (
AAPL - Analyst Report) avoided Capitol Hill like the plaque. Jobs kept the company’s lobbying budget low, and he never once testified in front of Congress. For whatever reason, Apple steered clear of D.C. politics.
The company has become a bit more politically active under CEO Tim Cook, and that was best exemplified in 2013 when Cook appeared for questioning regarding Apple’s tax avoidance.
When pressed about Apple’s off-shore banking activities, including its decision to move hundreds of millions in profits to Ireland, Cook snapped back: “We pay all the taxes we owe—every single dollar.”
“We don’t depend on tax gimmicks,” he would later add.
For more coverage on the latest congressional hearings from Wells Fargo and Mylan, check out this week’s episode of the Zacks Friday Finish Line podcast:
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