A 'Toothless' Old Law Could Have New Fangs, Thanks to Robert Mueller

By Miles Parks, NPR

18 November 17

 

he law intended to shine a light on foreign entities and foreign governments working to influence policy in Washington, D.C., has been called everything from "toothless" to "a complete joke."

But Justice Department special counsel Robert Mueller isn't laughing — and neither may potential violators if he decides to make it his new weapon of choice.

From 1966 to 2017, the Justice Department sought just seven prosecutions under the Foreign Agents Registration Act, or FARA, which requires Americans working on behalf of foreign governments, foreign political parties, or any person or organization outside the U.S., to disclose who is paying them to do what.

"The perception out there in the regulated community is that it's a toothless statute," said Christopher DeLacy, a partner at law firm Holland & Knight and leader of the firm's political law team.

Then, in October, Mueller's office changed that when it indicted former Trump campaign chairman Paul Manafort and his longtime business associate Rick Gates — instantly becoming the highest-profile FARA prosecution ever.

Those charges have raised the question about whether Mueller has more up his sleeve for other people swept up in the Russia probe who could be connected with lobbying and influence work for foreign governments and entities.

In the case of Manafort and Gates, they were charged with lobbying on behalf of the pro-Russian former president of Ukraine, Viktor Yanukovych, and not registering as required with the Justice Department. They were also charged with laundering millions of dollars, conspiring against the U.S. and tax fraud.

"I think these recent cases could be a watershed moment as far as enforcement of FARA," said DeLacy.

"The FARA violations seem to be on par with the tax and money laundering allegations in the indictments, and that's a pretty significant thing. It elevates FARA in a way that it really hasn't been elevated in recent memory."

Lobbyists, law firms and public relations spinners of D.C.'s K Street have not been abundantly transparent in accordance with the law.

The number of registrations has dwindled over the past 25 years, according to a report last year by the Justice Department Office of the Inspector General, even as foreign entities from all over the globe continue to have a huge stake in the decisions made by members of Congress, administration officials and others.

"The American people ... have a right to know"

FARA was enacted in 1938 to combat Nazi and communist propaganda spouting up on the front end of World War II. It doesn't make propaganda illegal, but instead requires "persons acting as agents of foreign principals in a political or quasi-political capacity" to reveal the connections they have abroad, including their finances.

"It's a statute designed to bring out into the sunlight the coordination between foreign actors, foreign governments, foreign corporations, foreign private citizens and those in the United States who are pushing for particular policy changes," said Stephen Vladeck, a law professor at the University of Texas at Austin.

"The idea [was] not that these policy changes are per se problematic, but that when a foreign interest is the one funding, calling the shots, pushing for some kind of change to domestic policy, the American people and American policymakers have a right to know," Vladeck explained.

Disclosing the foreign origins of messaging in the U.S. has taken on new urgency since Russia launched a major influence campaign against the 2016 presidential campaign. One of its state-backed news agencies, RT, has had to file as a foreign agent after a long back-and-forth with the Justice Department.

RT had argued it offers an alternative to mainstream American media outlets, and that it isn't the propaganda machine working to influence the American public that U.S. intelligence agencies have concluded it is.

The information registrants file with the Justice Department is listed in a public database on the department's website, and RT's is listed here. The document revealed that over the two months before the filing, the company received $350,000 from ANO TV-Novosti, which the Justice Department says is a "Russian government entity."

"Americans have a right to know who is acting in the United States to influence the U.S. government or public on behalf of foreign principals," said acting Assistant Attorney General for National Security Dana Boente. "The Department of Justice is committed to enforcing FARA and expects compliance with the law by all entities engaged in specified activities on behalf of any foreign principal, regardless of its nationality."

Critics, however, have long questioned how committed the Justice Department actually is to enforcing the law.

The number of registrations began to plummet through the late 1990s, according to the Justice Department's IG report, leaving the total number of active foreign principals at 561 at the end of 2014 — compared to a high of 2,079 in 1991.

That can partially be explained by a registration fee being introduced in 1993 and another law, the Lobbying Disclosure Act, providing an exemption for a few select situations.

But no one in Washington thinks fewer people today are working for foreign entities to influence American policy than there were 25 years ago. One theory is that the Justice Department on a whole hasn't been interested in prosecuting cases related to FARA, so foreign agents have, on a whole, been lax in reporting.

Fewer than 10 staffers at the Justice Department are devoted full time to investigating and enforcing FARA cases, said Sen. Chuck Grassley, R-Iowa, at a Senate Judiciary Committee hearing in July.

"It appears that the Justice Department and FBI have been seriously lax in enforcing FARA for a long time," Grassley said.

Other observers just call it a different strategy.

"[The Justice Department's] primary goal is to get people into compliance with the law and they've been less focused on enforcement," said DeLacy. "They haven't taken the approach that perhaps the IRS takes, where they want to make an example out of someone and bring everyone else into line. Because it's such a dramatic enforcement option."

That, however, could be changing with the spotlight on the law in the ongoing Russia imbroglio.

Mueller's next steps

With Manafort and Gates charged, one next potential FARA target for Mueller is former national security adviser Michael Flynn. Flynn belatedly filed a FARA registration in March for work his consulting firm did on behalf of the Turkish government. That in itself isn't necessarily a problem — the Justice Department makes it a policy to accept late filings rather than punish the practice, as a means to encourage filing at all.

But Manafort and Gates also had belatedly registered under FARA. The problem was that their filings were allegedly false and misleading about the extent of their lobbying work on behalf of the Ukrainian government.

One important question for Flynn will be whether his FARA registration accurately and completely portrays the facts as Mueller's team sees them.

Lawyer Robert Kelner, of law firm Covington & Burling, is a FARA expert and one of Flynn's attorneys. He declined to comment on the Mueller investigation or on the FARA implications specifically for his client.

He did talk with NPR generally about foreign agent registration and said the cases that have been prosecuted "usually are prosecuted because they involve something other than a FARA violation occurring at the same time."

It's unclear how charges the special counsel brings might reverberate within the lobbying and legal communities, especially since Mueller is a special investigator, and not a permanent member of the Justice Department's FARA team.

The Justice Department officials who talked with the Justice Department inspector general and the attorneys who talked with NPR agreed that the law as it stands now is too broad in providing exemptions and definitions of who must register.

That makes it difficult for the many people working on the outskirts of politics to know whether registration is necessary, but also for prosecutors to prove someone was deliberately evading the law.

"The statute itself is extremely vague: It contains a number of terms that are not well-defined. There's very little case law interpreting it," Kelner said. "There's been a lot of confusion about what it means and very, very little enforcement and that tends to lead to an atmosphere in which lots of firms don't pay very close attention to a statute that they don't understand."

Fixing FARA

Joe Sandler, an attorney with law firm Sandler Reiff Lamb Rosenstein & Birkenstock, agreed there is "a genuine lack of understanding of the breadth of this law."

Another problem, Sandler says, is the lack of tools the Justice Department has in investigating potential candidates for FARA registration.

Investigators don't have authority to issue civil investigative demands, or CIDs, for example, which legally compel the subjects of investigations to provide information and documents. As it stands now, investigators can ask for information from foreign agents, but short of putting together a criminal indictment, the FARA office can't force those potentially subject to the law to comply.

"The major thing that needs to be done is essentially putting a system of civil enforcement," Sandler said, "so there's not the choice to prosecute criminally or not enforce at all."

Grassley and Rep. Mike Johnson, R-La., recently introduced identical legislation in both the House and Senate that would amend FARA and give investigators the power to issue CIDs. It would also charge the Justice Department with developing a "comprehensive strategy" to improve enforcement, call for more frequent filings from FARA registrants and end the Lobbying Disclosure Act exemption.

"Given recent Russian and other efforts to influence our elections," Grassley said, "this law has never been more important."