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The “foreign agents” law Paul Manafort is charged with breaking is wildly underenforced

November 6, 2017
In The News
The bill would also require additional disclosure of information disseminated by lobbyists. And last week, Sen. Check Grassley (R-IA) and Rep. Mike Johnson (R-LA) introduced a bill that would end the foreign company loophole.
Vox

The first grand jury indictment in special counsel Robert Mueller’s investigation into Russian interference in the 2016 election has thrust a little-known law, one intended to monitor foreign influence in American politics, into the spotlight.

President Trump’s former campaign manager Paul J. Manafort Jr. and his business partner Richard W. Gates III have been charged with violating the Foreign Agents Registration Act, which requires those in the US working on behalf of a foreign government or political party to keep the Justice Department informed about what they’re doing.

Manafort and Gates reportedly made more than $75 million helping to promote a pro-Russia Ukrainian party, and went to considerable lengths to hide the arrangement.

FARA dates to 1938 and was enacted in response to concerns about Nazi and communist propaganda in the US. For the first several decades the law was in effect, the focus was on propagandizing, but influence peddling came under new scrutiny when the law was amended in 1966.

The law’s intent is to provide transparency into how foreign powers attempt to influence US policies on everything from tourism to multimillion-dollar arms deals to foreign aid. While the purpose is not to prevent foreign influence, per se, it does require foreign agents to provide significantly more detail on their political activities than is required of domestic lobbyists.

What the pro-transparency law requires

Under FARA, foreign lobbyists must register with the DOJ within 10 days of reaching an agreement with their foreign clients — and, at the same time, file a copy of their contract. They then must file semiannual reports on everything they did for their foreign clients and any funds exchanged, including any political contributions made by lobbyists.

Any promotional materials sent on behalf of foreign clients to more than one person must be filed with the Justice Department within 48 hours of distribution. (And such materials must include a disclosure statement making it clear to recipients that such materials were distributed on behalf of a foreign power.) These documents are all made publicly available on the DOJ’s website.

This is all true in theory.

Unfortunately, compliance with the law is very low, and the DOJ rarely pursues enforcement. In fact, its stated policy is to rely on “voluntary compliance,” a manifestly ineffective strategy that allows some foreign agents, like Manafort, to fall through the cracks.

A 2016 audit of FARA by the Justice Department’s inspector general found “widespread delinquencies” in compliance rates. Their review of documents filed from 2013 to 2015 found that:

  • 62 percent of new registrants filed their documentation late
  • 50 percent failed to file their semiannual reports in a timely manner
  • 61 percent failed to file their informational materials within the required 48-hour period
  • 47 percent of informational materials did not include the required disclosure statement

There is no way of knowing how many people ought to be registering under FARA but simply ignore the law.

Tardy filing of documentation is a big deal. When information is filed significantly late, the issues it addresses may have already been settled, and the value of knowing the information is greatly diminished. Transparency must be timely for the public to know how foreign governments and parties are trying to shape US policy.

Yet despite the importance of timely filing, the department’s enforcement of the law is virtually nonexistent. Currently under FARA, the department only has two enforcement tools at its disposal: filing a civil injunction or pursuing criminal charges.

A civil injunction essentially means that the Justice Department can request a district court to order registrants to halt their activities until they comply with the law.

Yet the DOJ has apparently not pursued a civil injunction for FARA violations since 1991. (It can be hard to check, because the department doesn’t release these numbers.)

Alternatively, the department can pursue a criminal charge, which has a much higher burden of proof. Until the indictments against Manafort and Gates, the DOJ had only pursued criminal charges for FARA violations seven times in the past 50 years.

The most recent was in 2010, when former Rep. Mark Deli Siljander (R-MI) pleaded guilty to acting as an unregistered foreign agent. Siljanger worked on behalf of the Islamic American Relief Agency (IARA) to lobby the Senate Finance Committee to remove the group from a list of charities suspected of having terrorist connections. He was sentenced to a year in prison.

In 2014, the Project on Government Oversight (POGO), where I work, released the results of an investigation into FARA compliance that recommended an additional enforcement mechanism: incorporating civil fines into the law. We proposed fining offenders who don’t properly label their FARA filings, who file late, or who don’t register or file required information.

 

But a lack of effective enforcement mechanisms is not the only issue with FARA.

FBI agents want more vigorous prosecution, but haven’t gotten it

Poor administration of the law can be traced in part to a basic disagreement within Justice about the purpose of the law and what constitutes a prosecutable FARA case. The FARA enforcement unit, housed inside the national security division of the DOJ, believes its main goal should be to encourage maximum disclosure of lobbying and other activities — by encouraging and assisting with voluntary disclosure.

FBI agents, on the other hand, think that more aggressive prosecution of people who have not registered would discourage untoward activity, up to and including spying — but they can’t pursue such cases without the backing of the enforcement unit. The enforcement unit denies that it is reluctant to pursue criminal charges, but argues that it can be harder than agents think to prove willful violation of the law.

The inspector general recommended that the department develop a coherent, comprehensive strategy for enforcement, a recommendation the DOJ accepted but has yet to complete.

Ambiguity in the law also gives potential registrants an excuse for noncompliance. For example, the definitions of what constitutes a “foreign agent” or “political activity” are purposely broad in order to capture all individuals who may be working to influence American politicians (and ordinary citizens) on behalf of foreign parties. Yet it also leads to lots of questions about exactly what kind of activity and relationships require a FARA registration.

The Justice Department will offer formal advisory opinions to people who are unsure whether they are required to register, but those opinions are not publicly available. If potential registrants don’t actively reach out to the DOJ, it can be almost impossible to discover if there are foreign agents flying under the radar — either unaware of or misinterpreting the law.

Although summaries of some advisory opinions have been posted online, they do not address some hotly contested gray areas. Some FARA critics have suggested that Washington think tanks accepting multimillion-dollar donations from foreign governments might have to register and disclose their political activities. At present, they do not.

Another problem: lobbying for foreign businesses, as opposed to governments, is treated differently by the law

And FARA contains giant loopholes. One of the biggest and most commonly used is an exemption that allows foreign agents working on behalf of foreign companies — as compared to foreign governments or political parties — to register under the far less strict Lobbying Disclosure Act rather than FARA. But foreign governments and foreign business interests are not always as distinct from one another as they are in the United States.

And unlike FARA, the Lobbying Disclosure Act allows those with lobbying income below $2,500 or expenses below $10,000 to forgo registering at all. (After the Lobbying Disclosure Act was passed, in 1995, registrations under FARA declined sharply.)

The ambiguities in the law were on display in the debate surrounding Michael Flynn’s extremely belated FARA registration (filed in March 2017 about activities in 2016). Before joining the Trump administration as the president’s national security adviser, Flynn had been hired by a private Dutch corporation to promote the Turkish government’s interests, following a failed military coup.

Flynn apparently concluded that because his client was a foreign corporation, rather than a foreign government, he could disclose his company’s activities under the Lobbying Disclosure Act. However, the “principal beneficiary” of his work was the Turkish government, which triggered a FARA registration requirement, according to the Justice Department.

In his after-the-fact registration, Flynn argued that this was an “uncertain standard” and pointed out that the language about the “principal beneficiary” is not included in the law itself but in more obscure regulations developed by the DOJ. Furthermore, exactly how the Justice Department defines “principal beneficiary” is unclear.

 

The inspector general recommended a formal review of the LDA exemption, and pro-transparency groups like the Project on Government Oversight and Demand Progresshave recommended that the foreign-company/foreign-government exemption be removed altogether.

Will the Russia scandal spur reform?

Congressional attention to problems with FARA has been sporadic since the 1966 amendment of the law. But even before the news about Manafort and Gates, allegations of Russia’s improper interventions in the 2016 election renewed interest in the law. In July, the Senate Judiciary Committee held a hearing on oversight of FARA that indicated broad bipartisan support for addressing some of the law’s failings. And throughout the past year, several pieces of legislation to reform it have been introduced, though none have yet passed.

Sen. Tammy Duckworth (D-IL) introduced a bill in July to amend FARA to add civil fines as an enforcement tool. The bill would also require additional disclosure of information disseminated by lobbyists. And last week, Sen. Check Grassley (R-IA) and Rep. Mike Johnson (R-LA) introduced a bill that would end the foreign company loophole.

FARA is one of the only ways the public can see firsthand how foreign powers wield influence in the US; documents filed under the law provide unprecedented insight into foreign lobbying methods.

The indictment of Manafort and Gates hints at the untapped power of FARA. It also draws attention to the Justice Department’s longstanding underenforcement of the law — which is a deep disservice to the public.