The first planned US overhaul of foreign lobbying disclosure rules in 30 years is rooted in more aggressive Justice Department enforcement that’s left a growing pool of lawyers practicing in the space unsure about its reach.
Practitioner interest and confusion surrounding the Foreign Agents Registration Act comes amid investigations and lawsuits to compel lobbying transparency from prominent figures. Cases have involved allies of the previous two presidents, including a probe into whether Rudy Giuliani was acting as an unregistered agent for Ukrainian nationals and an indictment of Obama White House counsel Greg Craig. Giuliani has not been charged and Craig was found not guilty.
“Ultimately, the reason there are more attorneys and questions is because of” DOJ’s “significantly enhanced enforcement posture,” said Brandon Van Grack, who was chief of DOJ’s FARA Unit until early 2021 and now co-chairs Morrison Foerster’s national security practice. In drafting an upcoming proposed rule, the department “understood out of necessity that some of these questions required clarity.”
Carrying a maximum prison sentence of five years for willful offenders, FARA mandates public disclosures when individuals, companies, or nonprofits act on behalf of foreign interests. It contains exceptions that apply to attorneys, which have proven difficult to interpret for work at the border of legal representation and political advocacy.
Those exemptions are now slated for a regulatory rewrite, with implications for lawyers—both those hoping to provide clarity to clients on whether they need to register and others concerned about their own need to file. FARA specialists anticipate the proposal by year’s end after DOJ missed its planned September deadline.
FARA was enacted in response to growing concerns about Nazi propaganda and influence in the 1930s. Amended periodically by Congress, the Justice Department now wants to bring the law into the 21st century just as a number of proposed legislative updates are also circulating on Capitol Hill.
Over the years, the FARA bar has expanded from politically focused firms into Big Law white-collar practices, particularly those with a strong international presence. A 2016 DOJ inspector general report called out enforcement deficiencies, leading to the department’s newfound emphasis.
Special Counsel Robert Mueller’s charges against lobbyists Paul Manafort and Rick Gates growing from his Trump-era investigation of Russian influence in the 2016 election kicked off a spike in investigations and high-profile indictments. Today, the law is a core element of the government’s strategy on national security and counter-espionage. Recent cases have also included interests linked to China, Pakistan, Iraq, and Zimbabwe.
Earlier this month, a judge dismissed DOJ’s civil lawsuit accusing casino magnate Steve Wynn of failing to register as a foreign agent for lobbying the Trump administration on behalf of China. Federal prosecutors closed their case last week against Trump ally Tom Barrack, who testified Tuesday at his trial on charges accusing him of violating a statute closely related to FARA.
DOJ’s 2019 civil settlement with Skadden to register as an agent for the Ukraine government and the acquittal of the firm’s former partner Craig on FARA charges continue to reverberate at law firms more attuned to FARA’s intricacies than in prior years.
An advanced rulemaking notice last year, which led to comment letters from firms such as Squire Patton Boggs and WilmerHale, revealed DOJ’s interest in revising particular aspects of FARA exemptions and other provisions with consequences for attorneys.
The request for public input last December signaled DOJ’s interest in amending how it interprets an exemption for “normal legal representation” in a criminal, civil, or agency proceeding.
Joshua Rosenstein, a veteran FARA lawyer with Sandler Reiff, said he routinely fields questions from clients who practice at other firms about how to construe this exemption. Although the department provided guidance recently that recognizes modern lawyering has veered into the public relations realm, DOJ has still been vague and inconsistent as to which forms of PR would remove attorneys’ eligibility for an exemption, he said.
“We often get questions—how much can they say in the course of that initial press release? If they try to tell their story and potentially impact a jury pool, is that too much, if their client is a foreign government, for example?” Rosenstein said. “Or is that viewed as safe because it doesn’t cross a line beyond normal lawyering in 2022? I don’t think there’s a clear answer to that.”
Another issue is the sheer volume of attorneys who “have these dual roles where they’re both lawyer and political consultant,” said Kate Belinski, a partner at Ballard Spahr. “They may be doing the same thing for the same client and some of it’s legal work and some of it is more lobbying and political advising. As that’s become more commonplace I think that has complicated things for lawyers who are working in those roles.”
By and large, lawyers attempt to avoid conducting activity that would require disclosure, as concerns of attorney-client privilege or aspirations for political appointments tend to weigh on them, FARA practitioners say.
An update to the legal representation exemption appears likely to expand the circumstances lawyers can confidently avoid disclosure. But DOJ stated in last year’s notice that it’s also considering going the opposite direction in a separate FARA exemption that’s applicable to attorneys.
A narrowing of the commercial exemption, as the department suggested is underway, may still be helpful for attorneys who’ve been wrestling with the old regulatory language’s vagueness.
Currently, this exemption precludes FARA registration when the activity for a foreign principal is “private and nonpolitical” and advances “trade or commerce” for that principal. The exemption doesn’t apply, however, when the activities “directly promote” the public or political interests of a foreign government or political party.
“How do you adequately assess whether the work contemplated in the United States would ‘directly promote’ the public or political interest of the Chinese government?” said David Laufman, a partner at Wiggin & Dana who previously oversaw FARA enforcement at the department. “That is bedeviling, opaque language, riven with enormous subjectivity.”
If DOJ does curb the availability of this exemption, it would expand the pool of potential lawyers subject to FARA registration. This is one instance in which the attorneys eager for clarity would still be displeased if their legal work now triggers FARA obligations.
Prosecutors, therefore, would stand to benefit as well.
“Ultimately, when conduct has crossed the line, the Justice Department is going to have some regulatory hook to point at,” Rosenstein said, “when they may not have it today.”
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