Menendez Indicted as Foreign Agent After Thwarting Related Bill

Sen. Robert Menendez blocked legislation designed to strengthen federal efforts to combat foreign influence during the same period he allegedly conspired to act as an agent for Egypt.

The New Jersey Democrat, as chair of the Senate Foreign Relations Committee, held significant sway over the fate of proposed amendments that sought to modernize the Foreign Agents Registration Act. Menendez stepped down from that post after his prior corruption indictment last month.

Menendez was seen on Capitol Hill as the primary foil responsible for thwarting various legislative efforts to give DOJ greater tools when enforcing FARA, according to two sources involved in those talks.

Lawmakers in both parties have called for modernizing the 1938 law mandating public disclosure when individuals and companies act on behalf of foreign interests. Justice Department investigations under it have steadily increased since 2016.

A comprehensive update to FARA has never gained traction on Capitol Hill. Menendez was among the forces in its way—both publicly in blocking an expedited vote in 2020 on a sweeping FARA overhaul and behind the scenes as head of the panel with jurisdiction over the foreign lobbying disclosure law.

Now, his indictment for allegedly unlawfully influencing US policy on behalf of the Egyptian government—under a statute closely related to FARA— is spurring new questions about his motivations in thwarting changes to the law.

“Was this whole thing done just to cover up what he was doing and to make sure that if he got caught the penalties wouldn’t be that severe?” said Craig Holman, government affairs lobbyist at Public Citizen.

In a December 2020 Senate floor speech, Menendez explained his move to prevent the chamber from voting on the FARA package, backed by Sen. Charles Grassley (R-Iowa), that would’ve boosted penalties against those evading FARA. He urged colleagues to “take a step back and take a comprehensive look” at the legislation.

A Grassley spokesperson said Thursday, after learning that Menendez had been indicted for allegedly conspiring to act as a foreign agent himself, that the New Jersey senator’s office hasn’t meaningfully engaged on efforts since its late 2020 defeat to revive the FARA proposal.

“Perhaps unsurprisingly, Menendez’ office has yet to provide any substantive feedback or collaboration on the FARA legislation, despite repeated overtures,” the Grassley aide said.

A representative for Menendez didn’t respond to a request for comment. He issued a statement denying wrongdoing in response to the new charge.

Menendez isn’t accused of violating FARA because as a seated senator, he falls under a different statute. Menendez is charged under a rarely utilized law forbidding public officials from influencing US policy on behalf of overseas interests. Unlike FARA, filing a public disclosure about his activity wasn’t an option.

The Justice Department now alleges Menendez conspired to act as an agent of a foreign principal—the Egyptian government and Egyptian officials who were required to register under FARA, according to prosecutors.

Multiple carveouts within FARA have created uncertainty for defense lawyers representing clients hoping to avoid the law’s onerous reporting requirements. There are numerous circumstances in which the law’s ambiguity and outdated language have necessitated a legislative fix, practitioners say. But as hopes for lawmakers to enact a bill have dwindled, advocates have turned their focus on DOJ to adopt a regulatory update. That effort has also stalled.

Now, with Menendez’s emergence as the latest high-profile official charged with improper foreign advocacy, prospects might improve.

“Whenever there is a FARA-related indictment, particularly one that is high-profile, it focuses attention back on the administration and enforcement of FARA, so this could fuel the fire for further movement on some of the FARA reform efforts,” said Tessa Capeloto, who advises clients on FARA compliance as a partner at Wiley Rein.

Just as a past scandal involving former lobbyist Jack Abramoff preceded passage of lobbying legislation, DOJ’s prosecution of Menendez could spur Congress to overcome hurdles to a FARA amendment, said Joshua Rosenstein, a veteran FARA lawyer at Sandler Reiff.

Having Menendez removed from his role overseeing the committee where FARA bills are initially referred also eliminates a prior blockade.

If prosecutors are able to prove that Menendez didn’t just act on Egypt’s behalf, it would be particularly tough for Congress to ignore, given that, as cited in the indictment, he was simultaneously publicly urging DOJ to launch a FARA investigation into a Republican politician, Rosenstein said.

“It politically becomes much more difficult,” Rosenstein added, “for members of Congress to wash their hands of the situation.”